Carl Icahn's $1.5 Billion Crypto Investment Backs Buy the Dip Strategy

Carl Icahn
Credit: Brendan McDermid - Reuters /

Billionaire investor Carl Icahn discussed plans this week to enter the crypto markets in a big way. The former crypto skeptic told Bloomberg he’s thinking about an investment of around $1.5 billion in cryptocurrency. The world’s fifth wealthiest hedge fund manager also noted that “much of the cryptocurrency issued today will not survive.”

“I’m looking at the whole business and how I can get involved in it with Icahn Enterprises in a relatively big way because, I think, it’s here to stay in one form or another,” he said in an interview on Tuesday.

Icahn, 85, is of the opinion that cryptocurrencies have the potential to protect investor money from devaluation due to aggressive quantitative easing measures. The legendary Wall Street investor’s involvement would further enhance institutional and retail investors’ confidence in crypto markets. Before Icahn, Mark Cuban, Ray Dalio, Michael Saylor, and Howard Marks have also changed their negative outlook about the nascent technology.

Icahn's Crypto Backing is a Big Win for Bulls

Bitcoin (BTC) has lost hundreds of billions dollars in market cap in the last few weeks after Elon Musk raised questions over the use of fossil fuel in bitcoin mining and suspended Tesla (TSLA) product purchases using BTC.

Investors, who had bought bitcoin on the early year rally, saw losses amid a surprise price collapse. Nevertheless, increasing investments from the world’s most prominent investors will help soothe bearish sentiments. Icahn, who has a net worth of $16.7 billion, said his company hasn’t bought any cryptocurrency yet and is still exploring ways to invest in crypto markets.

“A big way for us would be a billion dollars, a billion and a half dollars, something like that. That would be sort of a big way, I guess, for us. But sometimes we go bigger than that, sometimes a lot smaller. I’m not going to say exactly.”

He has a history of buying beaten-down stocks and helping to rebuild the company to achieve market-beating returns. He doesn’t appear worried about the recent crypto price collapse and tightening scrutiny. In fact, his stance in investing $1.5 billion hints that the legendary investor is seeing the dip as a buying opportunity. Prior to Icahn, the founder of $159 billion quant hedge fund Bridgewater Associates Ray Dalio and Nobel Prize winner economist Robert Shiller expressed the intention of investing in bitcoin.

Is the Bitcoin Dip Really an Attractive Entry Point?

Bitcoin price is struggling to break the $40K range after collapsing from an all-time high of around $63K that it hit last month. However, the price bounced back from last week's lows of $31K, thanks mainly to a stronger adoption rate at an institutional level.

Crypto markets can be highly speculative in nature. The recent price collapse is blamed on short-term issues related to mining processes and a crackdown by Chinese regulators. Besides that, stronger crypto adoption, as well as its growing acceptance as a store of value, are strengthening its future fundamentals. The crypto market volatility is obvious because digital currency is not yet fully mature and it has to pass through various regulatory thresholds. Institutional investors’ strategy of buying bitcoin and other cryptos on the dip fortifies its bullish outlook.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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