Billionaire Bill Ackman backs the crypto industry and reveals his investments

Billionaire investor and CEO of Pershing Square Capital Bill Ackman is optimistic about the prospects for cryptocurrencies, despite recent events in the industry, including collapse of FTX.

The telephone, the internet, and crypto share one thing in common. Each technology improves on the next in terms of its ability to facilitate fraud. As such, I was initially a crypto skeptic, but after studying some of the more interesting crypto projects, I have come to

— Bill Ackman (@BillAckman) November 20, 2022

“Cryptocurrencies have come to stay, and with proper oversight they can benefit society and develop the global economy. All reputable participants in the ecosystem must be highly motivated to expose and eliminate fraudulent projects, because they increase the risk of regulatory intervention,” Ackman said.

He said that initially he was skeptical, because he saw that the telephone, the internet, and cryptocurrencies share “one common trait”:

“Each of these technologies helps the other in terms of improving the ability to enable fraud.”

He also suspected that tokens have no intrinsic value and represent simply “the modern version of tulip mania.”

After studying “several interesting crypto projects,” Ackman concluded that the technology can help build “useful enterprises” that could not have been created without it.

“The ability to issue a token to incentivize participants in a venture is a powerful lever for accessing global labor resources to advance a project. The problem is that unethical providers can create tokens simply to execute Pump & Dump schemes,” the billionaire noted.

As examples of useful projects, the investor cited Helium and DIMO. The former is building a decentralized wireless network on blockchain, the latter uses the technology to collect on-board vehicle data.

Both platforms use their own tokens to reward participants, and Ackman believes they are capable of building a successful business model with a developed “two-sided market” for assets.

After the thread was published, the price of Helium (HNT) unexpectedly fell by about 10%. According to CoinGecko, the coin trades 96% below its all-time high recorded a year ago.

In October, Binance delisted several pairs with HNT. Forbes noted that shortly before this, an investigation was published into founders receiving “undisclosed payments worth millions of dollars” after the token launch. Helium attracted $250 million from Andreessen Horowitz, Tiger Global and other investors, but the network’s revenue for 2021 amounted to only $92,000.

The publication found that statements about using the protocol by the scooter-maker Lime (as mentioned by Ackman) do not correspond to reality, and gateway operators are operating at a loss. At the same time, the cost of equipment is $500.

The billionaire clarified that he is a “minor investor” in a number of crypto ventures, including DIMO, Goldfinch Finance, NFT project ORIGYN, TaxBit, TRM Labs, but not Helium. He valued his investments in the digital currencies industry at roughly 2% of total assets and described them largely as a “hobby and a learning exercise”.

Earlier in May, Ackman compared the Terra ecosystem’s collapse to the collapse of a financial pyramid.

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