Yerevan (CoinChapter.com) — U.S. billionaire Carl Icahn has been contemplating a potential $1.5 billion investment in cryptocurrencies like Bitcoin.
During an interview on Wednesday with Bloomberg, Icahn shared his thoughts about various topics, including digital assets.
“I’m looking at the whole business,” he said, talking about digital currencies. “I’m not looking at what to buy necessarily at this time.
When asked about his opinion on the current state of the cryptocurrency market, the veteran said he’s been watching the market closely and is looking at investing in crypto in “a relatively big way.” Asked to clarify what he means by “relatively big,” Icahn said, “Big way for us would not be to buy a few coins…A big way for us would be a billion dollars, a billion-and-a-half dollars.”
From Skeptic to Believer
It is worth mentioning that Carl Icahn was once a cryptocurrency sceptic.
Criticizing the craze over digital currency, he had chosen to stay away from the trend, considering it a bubble that would burst soon. He did honestly declare that he did not know much about the technology behind Bitcoin, but it did not look right to him.
He had even compared the whole thing to the Mississippi Swampland bubble in an attempt to warn investors that the fall would be disastrous.
The Mississippi Bubble
A “bubble” in the world of finance is a term given to a rapid, unsubstantiated rise in stock prices or the value of other assets such as real estate. Usually, the increase is followed by a harsh collapse in prices. These unusual fluctuations in prices and values are the product of unrestraint speculation rather than sensible investment practices followed while investing.
The man behind the infamous Mississippi Bubble was John Law, a Scottish economist. In the early 1700s, the French Government granted Law the authority to open up a company to oversee territorial claims made by the French around the Mississippi River.
Immediately law got to work. However, he needed funds to run the venture. Hence, he issued paper shares to investors to raise the required amount.
His marketing techniques worked as thousands swarmed to make an investment with the hope of getting big returns from treasures found in those lands. In a piece titled John Law and the Mississippi Bubble: 1718-1720 Jon Moen writes,
“The value of shares in the Mississippi Company rose dramatically as Law’s empire expanded. Investors from across France and Europe eagerly played in this new market. Shares in the Mississippi Company started at around 500 Livres tournois per share in January 1719.
By December 1719, share prices had reached 10,000 Livres, increasing 1900 percent in just under a year. The market became so seductive that people from the working class began investing whatever small sums they could scrape together. New millionaires were commonplace…Stock prices began falling in January 1720 as some investors sold shares to turn capital gains into gold coin.”
Will The Crypto Craze End Badly?
In his illustrative piece about the Mississippi Buble, Moen continues, “The paper notes of the Bank Royale were made legal tender, which meant that they could be used to pay taxes and settle most debts… This attempt to turn stock shares into money resulted in a sudden doubling of the money supply in France.
It is not surprising then that inflation started to take off. Inflation reached a monthly rate of 23 percent in January 1720. By September 1721, share prices had dropped to 500 livres, where they had been at the beginning.”
Though Icahn sees the value in cryptocurrency, the celebrity investor does not believe all altcoins will eventually make it. “I will say about cryptocurrencies … I don’t think there will be a lot of survivors out there trading today,” he said.
Whether he will end up investing 1.5 Billion USD or more, one has to wait and see. However, he is all set to join the other celebrity names who have gone from skeptics to major crypto investors.