Update disclaimer: A section of this article mistakenly stated that Bill Ackman invested in the Helium Network token (HNT) instead of DIMO. That section has been corrected.
- Ackman criticized crypto for facilitating scams.
- Former crypto skeptic now believes crypto can create huge value in society.
- Ackman invested in several tokens and crypto venture funds.
Billionaire and hedge fund manager Bill Ackman revealed his crypto investments and explained why his views on crypto changed. Ackman, whose net worth is estimated at $2.8 billion by Forbes, detailed his views on crypto in a Twitter thread.
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
The founder and CEO of Pershing Square Capital Management said that he was initially a crypto skeptic. His skepticism was largely due to the fact that crypto can facilitate scams.
However, “after studying some of the more interesting crypto projects,” Ackman said that he believes crypto could be useful.
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"I have come to believe that crypto can enable the formation of useful businesses and technologies that heretofore could not be created," Ackman said.
He further noted, that the ability to issue a token to incentivize participants in a venture “is a powerful lever in accessing a global workforce to advance a project.
Ackman acknowledged that there are problems with crypto, especially with fraud. Unethical promoters can “create tokens simply to facilitate pump and dump schemes,” Ackman said. He even stated that currently, frauds could outnumber legitimate businesses in crypto.
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Yet, despite that, Ackman believes that crypto has huge potential to benefit society. So much so, Ackman believes, that its impact “may eventually compare with the impact of the telephone and internet.”
Praising Helium (HNT)
Ackman said that he used to believe that crypto tokens have no intrinsic value. In his view, the crypto boom was just a “modern-day version of tulip mania.”
What changed his mind was seeing a few projects that helped him understand how tokens could build intrinsic value over time. He went on to explain his case for crypto using the example of the Helium Network project.
Helium Network is a crypto startup that provides a decentralized network for low-power, long-range IoT (Internet of Things) applications. The network allows ordinary people to buy devices that serve as hotspots and mine the HNT tokens. In time, the network becomes a “two-sided market” in which miners purchase hotspots to mine tokens. In turn, users buy the HNT tokens to use the network.
Given HNT’s ultimately finite supply, the balance between supply and demand yields a market price which increases or decreases over time along with the success of the Helium Wi-Fi network. As such, HNT becomes a valued commodity whose price is determined by supply and demand.
— Bill Ackman (@BillAckman) November 20, 2022
The model is a great example of how crypto projects allow independent parties to cooperate and create value. Moreover, it allows for cooperation that’s much more efficient than centralized control.
"Consider the capital investment and time required for Verizon or ATT to create the same network. Consider the regulatory hurdles and international coordination that would have to be overcome compared with the Helium model," Ackman points out.
Helium Network raised over $200 million from venture backers, including Andreessen Horowitz and Tiger Global. Its latest funding round valued the company at $1.2 billion. The project has found itself amid controversy, including allegedly using fraudulent endorsements.
Many early backers claim that their devices failed to achieve the promised returns, and all the while Helium executives and early investors got rich. The HNT token is down nearly 95% since last year.
Ackman Discloses his Holdings
After making his case for crypto, Ackman disclosed that he is a “small direct investor in crypto projects,” that happen to be DIMO, ORIGYNTech and Goldfinch Finance. Ackman futher noted that he is “uninvolved in Helium”.
DIMO is an app that helps drivers monetize their car data. ORIGYNTech is a platform that lets art owners certify their art using the blockchain. Goldfinch Finance is a stablecoin yield farming platform.
"I am also an investor in seven crypto VC funds and a small investor in companies that help with tax compliance and/or reduce fraud in crypto," Ackman revealed.
On the Flipside
- Ackman is considered a successful investor, although not all his calls were right. He recently bet big on Netflix, only to sell his entire stake after the company posted negative growth in April 2022. Ackman took a $400 million loss on his investment.
Why You Should Care
Bill Ackman is an influential investor. His advocacy of blockchain tech and crypto could help increase institutional adoption of the technology.
Read our recent overview of the Helium Network:
Helium (HNT): Project Review, Recent Developments, Future Events, Community
See Ackman rip apart Terra-Luna founders:
Wall Street Investor Compares the Terra Case to a “Pyramid Scam”
