(Kitco News) - One of the most challenging things to do as an investor is to take a contrarian approach to the consensus in the market and “buy when there is blood on the streets,” as the 19th-century British financier Nathan Rothschild is credited with saying.
Amid the collapsing prices in crypto markets as the FTX contagion spreads, two of the best-known investors of our time – Bill Ackman and Robert Kiyosaki – are both taking a page out of Rothschild's book and using this opportunity to scoop up their favorite tokens at fire-sale prices.
Ackman has been a well-known skeptic of the crypto industry for years due to its tendency to “facilitate fraud.” But the events of 2022 along with a deeper dive into “some of the more interesting crypto projects” has shifted the perspective of the Pershing Square Capital Management founder and chief executive, who now believes “that crypto can enable the formation of useful businesses and technologies that heretofore could not be created."
Ackman pointed to the ability of a company to issue a token that incentivizes participants to engage as a “powerful lever in accessing a global workforce to advance a project.”
“The problem with crypto is that unethical promoters can create tokens simply to facilitate pump-and-dump schemes,” he said. “It may in fact be that the vast majority of crypto coins are used for fraudulent purposes rather than for building legitimate businesses.”
Looking beyond questions of legitimacy, Ackman suggested that the application of sensible regulation and oversight could enable the potential of blockchain technology to one day rival the impact of the telephone and the Internet on the economy and society.
The billionaire investor pointed to two projects – Helium and DIMO – as examples of real-world use cases capable of creating a well-balanced market with a healthy level of supply and demand.
Helium is a global peer-to-peer powered Wi-Fi network used by various companies to track internet of things (IoT) devices, among other Wi-Fi network uses.
DIMO is a platform that allows drivers to connect with their vehicles to track its health and performance, get the best price when they sell, save money on maintenance, and earn rewards.
While Ackman has had a change of heart related to crypto, he still emphasizes the need for caution and due diligence when investing in the digital asset class.
“I invest more as a hobbyist trying to learn than as a careful investor as I minimize the time I spend on non-Pershing Square investments so please don’t rely on my due diligence or take any of the above as an investment recommendation,” he stated. “All of the above said, I think crypto is here to stay and with proper oversight and regulation, it has the potential to greatly benefit society and grow the global economy.”
Kiyosaki still believes in BTC and blockchain
Meanwhile, well-known Bitcoin bull Robert Kiyosaki reiterated his belief in the long-term success of Bitcoin and blockchain technology.
Speaking during an interview with iHeart radio host and ‘Uncommunist Manifesto’ author Mark Moss published on November 21, the ‘Rich Dad, Poor Dad’ author reiterated that he remains bullish on Bitcoin despite the fallout from FTX.
“I’m still bullish on Bitcoin but don’t consider silver and the silver ETF the same thing. And Bitcoin is not the same as Sam Bankman-Fried. (…) It’s FTX that’s the problem,” he said.
Kiyosaki went on to suggest that recent developments have made Bitcoin and Ether even less appealing to investors in his age demographic, but that he remains a believer.
“I’m still in favor of Bitcoin. I’m not against it as many people in my genre, in my age group, are, because I think Bitcoin is solid. I’m actually more into blockchain and I do own Ether.”
