Dan Loeb is a Billionaire investor who talked about his recent bets on various cryptocurrencies, RH, and various private companies. He mentioned it in his Q2 note to investors who are part of his hedge fund, Third Point.

First, the hedge fund invested in RH, which was formerly referred to as Restoration Hardware, during 2020’s fourth quarter. The fund owned 1.3 percent of the high-end furniture company’s shares. That means it owned 278,000 shares towards the end of March. Considering that RH’s stock price is about $720 currently, the position is worth a whopping $200 million.

In the second-quarter letter, he mentioned the CEO of RH, Gary Friedman. He described him as a great leader who knows how to allocate capital and innovate in the industry. The fund manager also talks about what gives RH an edge over its competitors. For Dan Loeb, it’s the premium brand and unique strategies.

More interestingly, he mentioned that cryptocurrencies are a transformative technology in the letter. He addressed the common assumption that cryptocurrencies are an alternative and speculative class. Nonetheless, he mentioned what was so fascinating about it as well, stating that it has potential. His prediction is that it can eventually become a disruptive technology. In the long run, he expects it to influence the brand ranges of the economy.

Dan Loeb had three main reasons why crypto was such a great investment. The first is its transparency and accessibility, which gives users peace of mind that their wealth isn’t subject to a centralized system. There is also the interesting prospect that it can speed up transactions while reducing their costs. This way, users can transfer their wealth from one corner of the world to another, without paying expensive transfer fees.

Perhaps his best reason to support backup, one that many other crypto enthusiasts agree with, is independence. According to him, using crypto makes him feel independent from the mainstream financial system. This way, he generates wealth but can afford the luxury of breaking away from the system.

His letter also shared some predictions of high volatility in terms of sentiment and price, moving forward. But even so, his bullish attitude meant that he thought crypto could fight those battles. Intriguingly, he downplayed the potential occurrence of a government crackdown by regulators. Rather, he supported it and stated that it would help clarify things a little more.

Dan Loeb’s crypto motivation pushed him to invest in a crypto legal company, CipherTrace. It is developed to help crypto exchanges meet financial rules. He has also invested in FTX, the digital asset exchange by Sam Bankman-Fried, and Bitwise, which acts as an asset manager.


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