Billionaire investor Bill Ackman says he could kick himself “for not understanding” cryptocurrencies. Speaking at a WSJ event, Ackman said he likes crypto and the technology behind it but at the same time said, “there’s no intrinsic value,” which to him is driven by cash generation. “You have to be able to build a discounted cash flow calculation,” he said on why is not investing in Bitcoin, and as such, he advises not to put a lot of your net worth in one or more cryptos rather in something “more durable.”
“I think crypto is a fascinating phenomenon. I think it’s a brilliant technology, and I kick myself for not understanding it; it’s one of the best speculations ever… But it’s not a place where I would feel comfortable personally putting any meaningful amount of assets in. Therefore I wouldn’t invest our firm’s assets.”
During the event, while disclosing an investment in Domino’s Pizza, he also talked about Federal Reserve’s policies. Ackman warned that inflation is “not temporary.” US inflation jumped 4.2% in April from 2.6% in the prior month — the highest since 2008. Everything from Copper, lumber, energy, housing, and Bitcoin is rising in value.
“Everything is inflating. That’s driven by a once-in-a-moment history. People are emerging from a pandemic with the endless spirit that comes from being locked up.”
And this is why the Fed may have to raise interest rates because “where they are, there’s a very good risk of the economy overheating.” At the Wall Street Journal Future of Everything Festival, he said,
“I think they’re going to have to raise rates, for sure. And I think they adjusted their policy, in my view, just at the wrong time. A pre-emptive policy toward inflation, I think, is a better approach, particularly in a world where we have massive, massive economic stimulus.”
Commenting on the unemployment numbers, he said that’s not due to any weakness in the economy, which is “crushing,” and businesses are booming. Adding that raising wages is good for workers and the economy, Ackman said,
“There are plenty of jobs; people haven’t had to work partially because of the stimulus…When unemployment benefits step back, and some of the stimulus wears off, there will be more of a supply of labor.”