Famous Pershing Square Capital Management founder and CEO Bill Ackman has turned his focus to Bitcoin, which has sparked a passionate discussion over the possible consequences of the cryptocurrency’s recent surge. Ackman made a playful scenario presentation on social media, which made many in the industry wonder what it could mean for the biggest cryptocurrency in the world.
Bitcoin And The Energy Dilemma
The conversation ignited when Ackman responded directly to a user’s post, highlighting the significant energy consumption resulting from the recent surge in BTC prices.
In his unconventional scenario, he suggests a chain reaction: the rally in Bitcoin prices leads to increased mining, subsequently driving up energy costs.
This, he argues, could trigger an inflationary surge and potentially devalue the US Dollar. The cycle, in Ackman’s eyes, might continue, sending crypto prices to unprecedented heights, energy prices soaring, and ultimately leading to the collapse of the economy.
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
Reactions From The Industry
The industry has not remained silent in the face of Ackman’s speculative scenario. Numerous players stepped forward to counter his Bitcoin mining analogy. Some argued that the legacy banking system consumes more energy than the crypto, attempting to downplay the concerns raised by Ackman.
Major Bitcoin proponents also extended invitations to Ackman for one-on-one discussions, emphasizing the need for a more nuanced understanding of the cryptocurrency’s dynamics.
BTCUSD trading at $69,983 on the weekly chart: TradingView.com
One notable figure in the crypto space, Michael Saylor, a staunch Bitcoin bull, joined the conversation with a different perspective. Saylor challenged Ackman to consider buying Bitcoin, not for the reasons outlined in his scenario but for the positive impact crypto miners have on reducing electricity costs for other consumers.
Saylor, whose company MicroStrategy Incorporated holds a substantial amount of Bitcoin, even offered to engage in a debate with Ackman, signaling a willingness to confront and discuss the concerns raised.
The Potential Shift In Ackman’s Stance
Acknowledged primarily as a short seller, Ackman’s foray into the Bitcoin discussion reveals a potential shift in his stance. While he has generally steered clear of Bitcoin and cryptocurrencies, his recent musings on social media suggest a reconsideration.
In 2022, Ackman admitted to being a small investor in some crypto projects and crypto venture funds, emphasizing his approach as more of a hobbyist eager to learn than a careful investor. The lingering question now is whether Ackman’s unconventional scenario could lead him to explore the possibility of investing in Bitcoin.
Ackman’s unconventional take on the top crypto asset’s potential impact on energy consumption and the economy has set the stage for a lively debate within the industry.
With major players extending invitations for discussions and BTC bulls challenging conventional narratives, the crypto community awaits whether Ackman’s perspective on the crypto will undergo a transformation similar to other high-profile figures who have shifted their stance upon closer exposure to the technology.
Source: Coingecko
Source: CoingeckoAt the time of writing, BTCUSD was nearing the highly-coveted $70K level, trading at $$69,950, up 2.4% and 12.4% in the daily and weekly timeframes, data from Coingecko shows.
Featured image from Alesia Kozik/Pexels, chart from TradingView
