American hedge fund manager and billionaire Bill Ackman has sparked a stir in the crypto community with his recent remarks about Bitcoin.
Ackman, the CEO of Pershing Square Capital, outlined a scenario where he might consider buying Bitcoin.
Why Bill Ackman Could Buy Bitcoin
Bill Ackman theorized that a Bitcoin price surge driven by increased demand and energy usage could lead to rising energy costs, inflation, a weakening dollar, and further BTC demand. He mused that such a scenario could ultimately lead to economic collapse, prompting him to contemplate investing in Bitcoin.
However, Ackman acknowledged the flip side of this scenario, recognizing its potential reversibility.
“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 goes to infinity, energy prices skyrocket, and the economy collapses,” Ackman said.
Read more: Bitcoin Price Prediction 2024 / 2025 / 2030
Ackman has had little to no relationship with cryptocurrency. In 2022, the billionaire stated that he believed that Sam Bankman-Fried was not a crook and that FTX failed because the disgraced founder was trying to avoid embarrassment. Before then, he had revealed that crypto comprised less than 2% of his investment portfolio.
At the time, Ackman said he was a small investor in some crypto projects and seven crypto venture funds, adding that his investments were more of a hobby.
Community Corrects Ackman’s Remarks
Ackman’s remarks prompted several comments from prominent figures in the crypto market, pointing out the flaw in his logic.
“Mining is insanely competitive and loses money at higher energy prices. Mining feedback loop actually drives miners towards more and more remote/stranded forms of energy, not upmarket towards power that competes with residential electricity demand. TL;DR Mining does not make energy more expensive. It allows us to monetize energy that otherwise would have been wasted,” Alexander Leishman, the CEO of River, said.
Meanwhile, MicroStrategy CEO Michael Saylor encouraged Ackman to consider buying Bitcoin but disagreed with his rationale. Saylor pointed out that most Bitcoin miners drove down electricity costs for consumers and extended an invitation for a one-on-one discussion.
Read more: How To Earn Free Bitcoin Mining Income Without Investment in 2024
Similarly, Pierre Rochard, Riot Platforms’ VP of Research, invited Ackman to delve into the economics of Bitcoin mining. Rochard also emphasized the intricate feedback loops and the limitations on Bitcoin’s purchasing power due to wealth effect spending and holder rebalancing.
Environmentalist and venture investor Daniel Batten also said that Ackman’s logic about BTC mining was flawed.
“The logic breaks down at the greater energy use=> drives up the price of energy. Bitcoin mining is a user par excellence of stranded/wasted energy, with ERCOT’s CEO crediting it for keeping power prices low,” Batten added.
The post Billionaire Bill Ackman Reveals Why He Will Buy Bitcoin appeared first on BeInCrypto.
