Fortress invested $20 million in Bitcoin

Fortress invested $20 million in Bitcoin

Fortress Investment Group LLC (NYSE:FIG) disclosed that it had purchased $20 million worth of Bitcoins in a recent Securities and Exchange Commission filing (h/t Saumya Vaishampayan at MarketWatch), but its investment has already lost value, dropping to $16.3 million as of December 31, 2013, which means that it’s approaching $10 million now if Fortress has held onto its position (unless they left their Bitcoins deposited with Mt. Gox, of course).

Play Quizzes 4

Fortress mentioned Bitcoin investment last year

Fortress Investment Group LLC (NYSE:FIG) director Michael Novogratz hadn’t kept his Bitcoin investment a secret, but when he first mentioned his interest in Bitcoins they were trading at about $200. If Fortress had invested $20 million at that point and sat on it they would still be up right now, so the firm must have either increased the size of its position at a higher price or tried to buy and sell the digital currency and gotten caught by its now infamous volatility.

Morningstar Investment Conference: Everything You Need To Know About Preferred Securities

Arena Investors Chilton Capital Management Schonfeld Strategic Advisors Robert Atchinson Phillip Gross favorite hedge fundsPreferred stock has been around for more than 150 years. One study suggests that the first shares of preferred stock were issued in 1836 by internal improvement companies in Maryland. However, some investors might not have given this asset class much thought until the government commandeered preferred shareholders' dividends in the government-sponsored enterprises Fannie Mae Read More

Fortress Investment Group LLC (NYSE:FIG) also announced the formation of the Bitcoin Investment Trust at the end of last year, reports Dan Primack for Fortune, which would attempt to act like a digital currency ETF and offer investors exposure to Bitcoin prices without actually buying and selling themselves. By putting themselves between retail investors and the unregulated Bitcoin markets, Fortress would take on a great deal of dealer risk but presumably would benefit from growing public interest. There has also been some talk about Fortress funding Bitcoin-related start-ups, though any plans related to Bitcoin are probably getting a hard second look right now.

Mt. Gox has finally filed for bankruptcy

A lot has happened in the Bitcoin world since the end of 2013, so Fortress Investment Group LLC (NYSE:FIG) might not be happy about its foray into digital currencies right now, but it does show how close Bitcoin came to being taken seriously by big financial institutions. If the collapse of Mt Gox (which is finally playing itself out now that the platform has filed for bankruptcy, according to Reuters) doesn’t spoil people’s enthusiasm for the cryptocurrency.

About 7% of the world’s Bitcoins disappeared when Mt. Gox went under, $480 million at current exchange rates, so a lot of people got burned. Many of the dynamics that made Bitcoin appealing in the first place (anonymous, deregulated, irreversible) are still in place, but they may not be seen through the same optimistic lens that they had been in the past.

Updated on

Michael has a Bachelor's Degree in mathematics and physics from Boston University and Master's Degree in physics from University of California, San Diego. He has worked as an editor and writer for several magazines. Prior to his career in journalism, Michael Worked in the Peace Corps teaching math and science in South Africa.
Previous article Google Accused Of Creating Racist Doodles
Next article Nokia Corporation (ADR) (NOK) Positives Offer Hope, But More Detail Needed

No posts to display