Legendary macro trader George Soros gave his remarks on the future of Bitcoin, Facebook, and Google at the annual World Economic Forum on Thursday.
The Future Of Bitcoin
There’s no denying that cryptocurrencies have had an incredible effect on the worldwide financial scene. As a form of investment with a low barrier to entry and more widely understood by the general public, it represents a unique crossover of technology into finance and is currently charging full speed ahead into uncharted territory. There are over one hundred cryptocurrencies, and almost all of them have seen exponential growth over the past year. While the crypto market took a rather large dive in the beginning of 2018, December was a record month for currencies such as Bitcoin that reached a record high of close to $20000 per coin.
However, one of the concerns of any cryptocurrency is the incredible volatility currently present in the market. As soon as the currency spiked, it proceeded to drop – by almost 50% value for Bitcoin. Because of the trepidation surrounding these risky investments, there’s been a good amount of regulation coming out of several countries that may put a damper on cryptocurrencies’ meteoric rise. With China discussing increased regulations for Bitcoin miners, Israel seeking to regulate the currency through their financial bureaus, and South Korea putting limits on who can trade and reducing anonymity, the future of Bitcoin isn’t looking quite as bright.
Legendary macro trader George Soros has pointed out another issue with Bitcoin and other currencies like it, stating that they’re a bubble and can’t function as a real currency due to the extreme volatility discussed above. But despite the big bubble, Soros isn’t anticipating the gigantic crash that many analysts warn of.
“Normally when you have a parabolic curve, eventually it has a very sharp break,” George Soros said Thursday. “But in this case, as long as you have dictatorships on the rise you will have a different ending, because the rulers in those countries will turn to Bitcoin to build a nest egg abroad.”
As long as Bitcoin remains an anonymous form of payment, it’s likely that it will always see some sort of use – even if the main usage is nefarious rather than as an accessible investment opportunity.
The Threat Of Internet Monopolies
George Soros went on to discuss the negative influence of Internet giants like Google and Facebook, labeling them an obstacle to innovation and warning that they could have devastating consequences on the functioning of democracy.
“Social media companies influence how people think and behave without them even being aware of it. This has far-reaching adverse consequences on the functioning of democracy, particularly on the integrity of elections,” said Soros.
Soros is the founder of the Open Society Foundations, which he created to support democracy and human rights around the world. He stated that social media companies deliberately seek to make their services addictive, which is “very harmful, particularly for adolescents.”
George Soros’ comments come at a time where US politics are embroiled in controversy over the alleged interference of the Russian government in the recent United States Presidential Elections.
“The power to shape people’s attention is increasingly concentrated in the hands of a few companies. It takes a real effort to assert and defend what John Stuart Mill called ‘the freedom of mind…There is a possibility that once lost, people who grow up in the digital age will have difficulty in regaining it. This may have far-reaching political consequences. People without the freedom of mind can be easily manipulated.”
This manipulation may end up to be the downfall of US global dominance, George Soros stated.
“Open societies are in crisis, and various forms of dictatorships and mafia states, exemplified by Putin’s Russia, are on the rise. In the US, President Trump would like to establish a mafia state but he can’t because the Constitution, other institutions, and a vibrant civil society won’t allow it….Not only the survival of open society, but the survival of our entire civilisation is at stake. The rise of leaders such as Kim Jong-Un in North Korea and Donald Trump in the US have much to do with this. Both seem willing to risk a nuclear war in order to keep themselves in power.”