Why does the man at the helm of $14 billion suddenly want to buy BTC?

Source: Blockchain Knight

American hedge fund manager and billionaire Bill Ackman’s recent remarks about BTC caused an uproar in the Crypto asset community.

Ackman, the CEO of Pershing Square Capital, outlined some scenarios in which one might consider buying BTC.

Ackman theorized that increased demand and energy usage would drive BTC prices soaring, leading to higher energy costs, inflation, a weaker dollar, and further BTC demand.

Ackman believes that this situation could eventually lead to an economic collapse, prompting him to consider investing in BTC.

However, Ackman also acknowledges the other side of the situation, namely its potential reversibility.

Ackman said: "The rise in BTC prices has led to an increase in mining volume and energy usage, pushing up energy costs, leading to rising inflation and depreciation of the US dollar, driving a further rise in BTC demand."

"But the increase in mining volume has promoted the demand for energy, and the cycle continues. In the end, the demand for BTC has become unlimited, energy prices have skyrocketed, and the economy has collapsed."

Ackman It has almost nothing to do with Crypto assets.

In 2022, the billionaire said he believed Sam Bankman-Fried was not a scammer and that FTX failed because the disgraced founder was trying to avoid embarrassment.

Previously, Ackman had revealed that Crypto assets accounted for less than 2% of his investment portfolio.

At the time, Ackman said he was a small investor in a number of crypto-asset projects and seven crypto-asset venture funds, adding that his investing was more of a hobby.

Ackman’s comments prompted comments from some of the biggest names in the crypto asset market, who pointed out flaws in Ackman’s logic.

River CEO Alexander Leishman said: "Mining is highly competitive, and the higher the energy price, the more money you lose. The feedback loop of mining actually encourages miners to use more and more remote/dispersed forms of energy, and Not high-end power that competes with residential electricity demand."

"TL/DR mining does not make energy more expensive. It allows us to monetize otherwise wasted energy ."

Meanwhile, MicroStrategy CEO Michael Saylor encouraged Ackman to consider buying BTC, but disagreed with his reasoning.

Saylor pointed out that most BTC miners reduce electricity costs for consumers. It then extended an invitation to Ackman for discussion.

Similarly, Pierre Rochard, vice president of research at Riot Platforms, also invited Ackman to delve into the economics of BTC mining.

Rochard also emphasized the intricate feedback loops and limitations on BTC’s purchasing power from wealth effect spending and holder rebalancing.

Environmentalist and venture investor Daniel Batten also said that Ackman’s logic about BTC mining is flawed.

Daniel said: “This logic breaks down when greater energy use ≥ drives energy prices up.”

“BTC mining is an outstanding way to strand/waste energy, ERCOT The CEO of also credits BTC mining for keeping electricity prices low."