Billionaire Bill Ackman reveals why he wants to buy Bitcoin.

American hedge fund manager and billionaire Bill Ackman recently caused quite a stir in the cryptocurrency community with his comments about Bitcoin.

Ackman, CEO of Pershing Square Capital, outlined scenarios in which you might consider purchasing Bitcoin.

Why Bill Ackman Could Buy Bitcoin

Bill Ackman theorizes that a surge in Bitcoin prices due to increased demand and increased energy usage could lead to higher energy costs, inflation, a weaker dollar, and increased demand for BTC. He believed that such a scenario could ultimately lead to an economic collapse, which led him to consider investing in Bitcoin.

But Ackman acknowledged the flip side of this scenario and its potential reversibility.

“Rising Bitcoin prices lead to increased mining, which leads to increased energy use, which leads to higher energy costs, increases inflation, causes the dollar to fall, which drives demand for Bitcoin, which leads to increased mining, which drives energy demand, and the cycle continues. Bitcoin goes to infinity, energy prices soar, and the economy collapses,” Ackman said.

Read more: Bitcoin price prediction for 2024/2025/2030

Bitcoin price performance. Source: TradingView

Ackman has little or no connection to cryptocurrency. In 2022, the billionaire said that Sam Bankman-Fried was not a fraudster and that he believed FTX failed because the disgraced founder was trying to avoid embarrassment. Before that, he revealed that cryptocurrencies accounted for less than 2% of his investment portfolio.

At the time, Ackman said he was a small investor in several cryptocurrency projects and seven cryptocurrency venture funds, adding that his investments were more of a hobby.

Community edits Ackman’s comments

Ackman’s comments prompted several comments from prominent figures in the cryptocurrency market, pointing out that his logic was flawed.

“Mining is highly competitive and you lose money when energy prices rise. The mining feedback loop actually steers miners toward increasingly remote or isolated forms of energy rather than high-end power that compete with residential electricity needs. TL;DR Mining does not make energy more expensive. Alexander Leishman, 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 reduce electricity costs for consumers and extend invitations to one-on-one discussions.

Read more: How to Earn Free Bitcoin Mining Profits Without Investment in 2024

Likewise, Pierre Rochard, Vice President of Research at Riot Platforms, invited Ackman to explore the economics of Bitcoin mining. Rochard also highlighted the limitations of Bitcoin’s purchasing power due to complex feedback loops and wealth effect spending and holder rebalancing.

Environmental activist and venture capitalist Daniel Batten also said Ackman’s logic on BTC mining was flawed.

“The more energy you use, the more logic breaks down => energy prices go up. “Bitcoin mining is an excellent technology that provides users with stranded/wasted energy, and ERCOT’s CEO credits it with keeping power prices low,” Batten added.

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