Bill Ackman suggests that Bitcoin’s price increase could lead to a chain reaction: higher demand and energy usage might drive up energy costs, fuel inflation, weaken the USD, and further increase the demand for BTC. He warns that this scenario could ultimately trigger an economic collapse, prompting him to consider investing in Bitcoin.
However, Ackman acknowledges the flip side of this scenario and recognizes its potential reversal.
He explains:
As Bitcoin’s price rises, mining activities increase, consuming more energy and driving up energy costs, leading to inflation and a weaker USD. This, in turn, boosts demand for Bitcoin, prompting more mining, further increasing energy demand, and perpetuating the cycle. Bitcoin spirals indefinitely, energy prices skyrocket, and the economy collapses.
Ackman has little to no involvement with cryptocurrencies. In 2022, the billionaire declared his belief in Sam Bankman-Fried not being a scammer and FTX’s failure due to the founder trying to avoid embarrassment. Previously, Ackman revealed that cryptocurrencies accounted for less than 2% of his investment portfolio.
At that time, Ackman stated he was a small investor in some cryptocurrency projects and seven cryptocurrency hedge funds, emphasizing that his investments were purely recreational.
So, while Ackman acknowledges the potential risks associated with Bitcoin’s growth, he remains cautious about its long-term implications.