Bill Ackman, an American billionaire hedge fund manager and Pershing Square’s founder and chief executive officer is flirting with the idea of taking a position in Bitcoin.
He cites the cryptocurrency’s potential for a meteoric price rise as his rationale.
A scenario:
Bitcoin price rise leads to increased mining and greater energy use, driving up the cost of energy, causing inflation to rise and the dollar to decline, driving demand for Bitcoin and increased mining, driving demand for energy and the cycle continues.
Bitcoin… https://t.co/a5LzX69R7q
— Bill Ackman (@BillAckman) March 9, 2024
In a recent interview, the outspoken hedge fund manager laid out a hypothetical scenario in which an escalating Bitcoin price could spur increased mining activity. This mining boom would drive up energy demand and costs, stoking inflation and weakening the U.S. dollar’s value. Such a feedback loop, Ackman theorized, could perpetuate rising Bitcoin prices through ever-increasing demand.
The problem of course is that it also works in reverse. https://t.co/s1rpdhlpfw
— Bill Ackman (@BillAckman) March 9, 2024
However, the Pershing Square Capital founder was quick to caveat that the opposite outcome is equally plausible.
Ackman’s musings mark a surprising pivot from his previous dismissive stance toward the crypto asset class. Last year, the billionaire faced intense backlash after touting the blockchain-based Helium network, which was later revealed to have misled investors about its technological capabilities and financials.
The investor has since withdrawn his endorsement of Helium, claiming his intent was to highlight the broader utility of crypto and tokenization models for businesses rather than promote any specific tokens.
Ackman’s contemplation of a Bitcoin investment has drawn many reactions from the crypto industry’s heavyweights.
Scaramucci, a well-known investor, told Ackman he should learn more about Bitcoin mining. He said miners use cheap energy sources that aren’t being used often, so they don’t have to raise prices and fees for other users.
Michael Saylor told Ackman to back the cryptocurrency for reasons other than what Ackman said he thought. Saylor argued that Bitcoin lowers net energy costs and emissions by speeding up the switch to clean energy sources. He offered to discuss the matter with Ackman further.
You should buy some #bitcoin, but not for the reasons cited above. Most bitcoin miners are driving the cost of electricity down for other consumers, not up. Let me know if you would like to discuss 1 on 1.
— Michael Saylor
(@saylor) March 9, 2024
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