Anthony Scaramucci says Elon Musk scared people off bitcoin but he backs it to soar like Amazon stock in the long run

Scaramucci
Anthony Scaramucci founded SkyBridge Capital.

  • Anthony Scaramucci said Elon Musk had “scared people” off bitcoin, but backed it to soar in the long run.
  • He said bitcoin was like Amazon stock, which swung dramatically in its early history.
  • Scaramucci’s SkyBridge capital has around $500 million in bitcoin and sees it as digital gold.
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Anthony Scaramucci has said that bitcoin will shoot higher in the long run despite some early setbacks – just like Amazon stock.

One of those setbacks has been the fact that Elon Musk “scared people” away from the cryptocurrency, the founder of SkyBridge Capital and former White House chief of communications told CNBC on Tuesday.

Musk’s electric car company Tesla stopped accepting bitcoin as payment in May due to its “insane” energy use, helping trigger a crash in the cryptocurrency. Bitcoin traded at around $33,000 on Wednesday, more than 45% below its record high of close to $65,000 reached in April.

Scaramucci, whose SkyBridge investment firm has around $500 million in bitcoin, said he thinks the huge volatility is more to do with the fact that the cryptocurrency is in the early stages of adoption than with Musk.

He compared bitcoin to Amazon, whose stock price has fluctuated dramatically through the years.

“If you went back to Amazon’s IPO back in 1997, if you held $10,000 of that stock on its IPO, it’s now worth $24 million. But you would have subjected yourself to eight periods of time where the stock dropped at least 50%.”

However, critics argue that bitcoin is not comparable to stocks as it has no intrinsic value.

Scaramucci said he was confident bitcoin would similarly shoot higher because millions more people would adopt it as a replacement for gold in investment portfolios.

Bitcoin fans argue the crypto asset’s scarcity means it can be a store of value that will protect investors against inflation, as gold traditionally has.

“Right now, we have about 125 million [bitcoin] users globally,” Scaramucci said. “Our research department of SkyBridge thinks that you will have at least a billion users by 2025.”

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Cathie Wood and Anthony Scaramucci discussed institutional investment in digital assets, brushed off bitcoin’s ESG woes, and warned investors about excessive leverage in a recent interview. Here are the 10 best quotes.

Cathie Wood
Cathie Wood is the CEO and chief investment officer of ARK Invest, which runs three of the highest-returning stock ETFs of the last three years.

  • Bitcoin bulls Cathie Wood and Anthony Scaramucci sat down for an interview with Bitcoin Magazine last week.
  • The pair praised bitcoin as a crypto “reserve currency,” but warned investors of the risk of leverage.
  • Scaramucci said he sees bitcoin hitting $100,000 by the end of 2021. Here are the 10 best quotes.
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Crypto bulls Cathie Wood of Ark Invest and Anthony Scaramucci of Skybridge Capital sat down for an interview last week with Bitcoin Magazine.

The pair praised digital assets, brushed off recent environmental concerns, and talked about their start in the crypto space during the conversation.

They also warned cryptocurrency investors to be careful with excessive leverage, with Scaramucci calling the practice a “knife in the steering wheel of your sports car.”

Here are the 10 best quotes from the interview, lightly edited and condensed for clarity:

Cathie Wood

  1. “Our conviction in bitcoin has only increased over the years. And I think the big exclamation point for me, in the early days, was my mentor Art Laffer…we were collaborating on a white paper and I said ‘Art, how big could this be.’ And he said, ‘well, how big is the US monetary base,’ at that time, it was $4.5 trillion today, it’s closer to $7.5 trillion, and so we ran with it and haven’t regretted it for one minute since.”
  2. “Bitcoin is the reserve currency of the crypto-asset ecosystem. It is the flight to safety currency. And I do believe that’s still the case.”
  3. “Beware, from a leverage point of view, you can lose everything out there in crypto if you’re a leveraged player. So buyer beware, be careful, but hang on for a beautiful ride.”
  4. “Putting bitcoin mining into a solar powerwall merchant power ecosystem so that it could absorb all the extra energy coming from the sun after the powerpack is filled up. That would add a new dimension of economics to this ecosystem and would encourage homeowners and utilities to add more solar than otherwise would be the case. So it’s actually going to accelerate the movement into renewables. I think that’s what’s going to bring institutions back.”
  5. “I think we used a million Monte Carlo simulations to figure out if institutions start going in, where will they go? Well, they’ll tiptoe in….according to those simulations, in order to maximize the Sharpe ratio, an institution might move towards 6% of a portfolio in bitcoin. In order to minimize volatility and enjoy the increased return associated with crypto, that percentage might be more like 2.5%.”

Anthony Scaramucci

1. “When I came out of the White House and got blown into Pennsylvania avenue, the first thing I did was buy the URL skyrbridgebitcoin.com. Why? It became very clear to me in my short stay in Washington that we would eventually be digitizing US currency…but I have to confess I was still very cautious. So I had a checklist, and there were three things on the list. Number one: were there at least a hundred million users…number two: what was the US regulatory landscape…was it going to be accepted clearly here…third thing was the storage…can I store it safely…where there are layers of insurance.”

2. “We’re embracing the volatility. Remember, volatility may not be a measurement of risk if you understand fundamentally what you own. You can use the volatility and the manic depression of the market to take advantage of the markets.”

3. “If you’re going from $4.5 trillion of dollar volume to $7.5 trillion of dollar volume…you just got taxed, ladies and gentleman. You know, the government didn’t impose it on you, but they secretly did it through the central bank…your purchasing power has eroded.”

4. “My first bitcoin was super hard to buy; that was my story, but once I owned my first bitcoin and I realized what was going on, I’m like ‘oh my god, I don’t own enough of this.’ So every month, I try to buy a little bit more for myself or my family.”

5. “Long-term, there’s no reason why this can’t be a half a million-dollar coin. But I do think you can still get to $100,000 this year just knowing what I know about demand and potential saturation levels. But I do want to emphasize what Cathie said about leverage…I’m going to remind everyone about something Warren Buffet said about leverage. It is a dagger coming out of the steering wheel of your sports car. And you’re traveling down an icy road in the winter, so when you need to hit the brakes, that’s when leverage is going to hurt you the most.”

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Bitcoin is scarce, valuable, and should be part of your 401(k), Anthony Scaramucci says

anthony scaramucci
SkyBridge Capital’s Anthony Scaramucci.

  • Bitcoin stands to be the best-performing asset in the next 10 years and should have a spot in retirement portfolios, Anthony Scaramucci tells 401K Specialist magazine.
  • Scaramucci said purchases of the volatile cryptocurrency should be made in “bite-size” chunks.
  • Bitcoin is “the technology that people are going to use for a large swath of commerce” over the next 100 years, said SkyBridge Capital’s founder.
  • See more stories on Insider’s business page.

Bitcoin should be a part of people’s retirement accounts as the cryptocurrency’s rewards outweigh its risks, Anthony Scaramucci, the founder of investment firm SkyBridge Capital, said in an interview with 401K Specialist, a magazine that covers defined contribution plans.

Bitcoin purchases should be “in bite-size, digestible chunks,” so that clients, including plan participants, will be comfortable holding the volatile asset, he told 401K Specialist magazine in an article published online Wednesday.

Bitcoin has been on a turbulent and mostly downward ride in May, rocked by worries ranging from China’s threats to restrict mining and trading activities surrounding the largest cryptocurrency to Tesla‘s decision to halt taking bitcoin as payment for its electric vehicles because of environmental concerns.

Bitcoin, which is prone to big price swings, has dropped about 32% so far in May to trade below $40,000.

But bitcoin’s volatility is one reason the digital currency should be part of a retirement portfolio, he said.

“People can trade within their 401k without tax consequences,” Scaramucci said. “If we’re right about Bitcoin and I was your financial advisor, I would tell you that over the next 100 years, this is the technology that people are going to use for a large swath of commerce on the planet.”

Bitcoins “are scarce, and they’re going to be valuable. For that reason, I do think it’s appropriate to own a few in a retirement account,” he said.

Scaramucci earlier this month defended the slide in bitcoin’s price in a Bloomberg interview, saying bitcoin has been able to “maintain its supremacy as the apex predator in digital currency.”

401K Specialist said Scaramucci recommends that non-professional investors have bitcoin exposure of no more than 5% of their retirement portfolios. SkyBridge’s bitcoin exposure has grown to more than $500 million, the magazine reported and noted that the money manager projects bitcoin will hit $100,000 this year.

Bitcoin “was the best performing asset over the last 10 years, and I predict it will be the best performing asset over the next 10 years,” said Scaramucci.

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Bitcoin is the ‘apex predator’ of digital currencies – and dogecoin may be the crypto equivalent of silver, hedge fund manager Anthony Scaramucci says

Anthony Scaramucci
Anthony Scaramucci.

  • Anthony Scaramucci called bitcoin the “apex predator” of digital currencies.
  • Dogecoin may be the silver to bitcoin’s gold, the hedge fund manager said.
  • He said he advises people to hold between 1% to 3% of bitcoin within their portfolios.
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Anthony Scaramucci, founder of investment firm SkyBridge Capital, defended bitcoin’s decline and said he advises investors to hold some amount of it as it’s the only cryptocurrency that’s achieved “escape velocity.”

Although other digital currencies have been gaining in popularity, bitcoin has managed to “maintain its supremacy as the apex predator in digital currency,” he said in a Bloomberg interview.

Bitcoin was last trading 7% lower on the day at around $45,700. It hit an all-time high near $65,000 in mid-April, but has lost momentum since and is now only up 57% so far this year. The digital asset was hit hard last week after Elon Musk cited climate-related concerns over its mining process and suspended bitcoin payments for Tesla.

Scaramucci, known for his infamously short stint as White House Director of Communications in the early days of Donald Trump’s presidency, has backed bitcoin for being a potential store of value compared to the US dollar. He says it would be responsible for him to advise clients to hold between 1-3% of the cryptocurrency in their portfolios.

“I’m not telling them you’ve got to own 100% of your net worth in it – but if we’re right, you don’t want to be missing out on this,” he told Bloomberg.

Read More: ‘Wolf of All Streets’ crypto trader Scott Melker breaks down his strategy for making money using ‘HODLing’ and 100-times trade opportunities – and shares 5 under-the-radar tokens he thinks could explode

Ethereum’s ether, which is trading around $3,480, is also in the process of achieving escape velocity now that major changes are coming to its blockchain, he said.

Escape velocity – a term usually used in physics – suggests that if there is a 20% chance that bitcoin hits $400,000 and an 80% chance that it goes to zero, it is still underpriced at any price below $80,000.

Dogecoin was trading 3% lower at 50 cents on Monday. Musk has been actively supporting the meme-inspired cryptocurrency, while criticizing bitcoin.

Scaramucci said dogecoin, which is now the fifth-largest cryptocurrency by market capitalization, may just be the silver to bitcoin’s gold. “This is happening. This is upon us right now – you either get it or you don’t get it,” he said. Typically, silver is a lot more volatile than gold, but tends to respond to similar market catalysts.

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Anthony Scaramucci’s SkyBridge fund tells bitcoin investors not to sweat over the cryptocurrency’s wild volatility

GettyImages 1169764411
Bitcoin has fallen sharply from recent highs.

Bitcoin may have tumbled from $65,000 to below $50,000 in just over a week, but investors should hold on and not sweat over the wild volatility, according to SkyBridge Partners.

“The reality of cryptocurrencies and even bitcoin… is that if you make an investment today… you have to expect multiple 20-30% pullbacks in the bull market phase,” SkyBridge’s co-chief investment officer Troy Gayeski told Bloomberg TV on Wednesday.

SkyBridge Capital – which was founded by Anthony Scaramucci, who later spent 10 days as Donald Trump’s White House communications director – remains bullish on bitcoin over the long term, Gayeski said.

The investment chief cited “extraordinary” money supply growth and said cryptocurrencies remained “in the early innings of the adoption cycle”. His advice to bitcoin investors was “don’t sweat the vol” – that is, volatility.

Bitcoin’s rally has been remarkable for its sheer speed and the amount of attention it has captured on Wall Street, with big banks and hedge funds getting involved.

The world’s most widely traded cryptocurrency has risen by 530% in the last 12 months. It hit a high of close to $65,000 in mid-April, boosted by the hype around Coinbase’s direct listing, before tumbling to near $47,000 a few days later. It has since rebounded somewhat and traded at around $54,500 on Thursday.

“This bull market is still younger than the last two, in terms of length,” Gayeski said, adding that he could see bitcoin doubling in value by the end of the year.

However, he said it may turn out to be the case that there is less price growth in the future than in previous bull markets. But he added: “It’s really hard to argue that it’s going to be a shorter bull market, there’s really no fact or basis for that, in our opinion.”

Gayeski said SkyBridge believes bitcoin will become the dominant store-of-value asset that investors turn to when they’re worried about inflation or market stress, like gold.

Goldman Sachs on Wednesday questioned this view, however, arguing bitcoin is so far failing as digital gold. The bank’s analysts argued bitcoin’s massive energy consumption, its lack of real uses, and competition from other cryptocurrencies are obstacles to more widespread adoption.

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Anthony Scaramucci says more companies should hold bitcoin in their balance sheet since the explosion in US money supply is a ‘silent tax on American savers’

Anthony Scaramucci
  • Anthony Scaramucci thinks responsible company treasurers have to think about adopting bitcoin.
  • He thinks a deluge of money supply in the US is in fact a “silent tax on American savers.”
  • He said a $1 million price target for bitcoin is likely, but would stick to his earlier prediction of $100,000.
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Hedge fund manager Anthony Scaramucci said in a recent interview more companies should begin to hold bitcoin because a flood of stimulus money in the US is actually a “silent tax on American savers.”

“A responsible CFO, or responsible treasurer, will have to think about other assets to hold as a potential store of value for their companies,” he said on CoinDesk TV.

The latest $1.9 trillion stimulus pumped into the economy, aimed at rescuing struggling families and unemployed Americans, represents 40% more dollar flow in more than two centuries, he said. That, according to the financier, is eroding the value of savings.

An abundance of US dollars theoretically pushes the value of the world’s reserve currency lower.

Scaramucci said the reason he is so bullish on bitcoin is that it’s a “solution” to the dilemma faced by middle and lower income people affected by the end of the Bretton Woods Agreement in 1971. That could mean the digital coin may become the currency of the world unless the US dollar is digitized and is no longer influenced by politicians and policymakers. That needs to happen soon, he said.

His company launched a bitcoin fund in December and filed for a bitcoin ETF last week. He also expects to add an Ethereum-based product in the future.

Scaramucci said a $1 million price target for bitcoin is likely, but would stick to his earlier prediction of $100,000 for now. He said he wanted to avoid getting into trouble with clients for announcing unconvincing predictions because “they’ve grown to think that I am nuts.”

Bitcoin was last trading 1.2% higher at $54,734 on Tuesday and is up 85% year-to-date.

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Anthony Scaramucci’s SkyBridge hedge fund just invested $25 million in a bitcoin fund as it sees an ‘avalanche of institutional investors’ buying crypto in 2021

Anthony Scaramucci
  • Anthony Scaramucci’s SkyBridge Capital just launched a bitcoin fund and invested $25 million of capital. It will go live to outside investors in 2021.
  • After bitcoin’s 200% rally this year, investors may be hesitant to buy bitcoin at current levels. But Scaramucci told CNBC the coin is in its “early innings,” and he wants to get in before the price soars even higher. 
  • “We could be at the precursor of an avalanche of institutional investors heading in,” Scaramucci said on Tuesday.
  • Visit Business Insider’s homepage for more stories.

The latest institutional investor to dive into bitcoin is SkyBridge capital, Anthony Scaramucci’s hedge fund. The $9.3 billion firm filed an SEC form D on Monday to launch the “SkyBridge Bitcoin Fund L.P.”

Scaramucci told CNBC that the fund started trading on Tuesday with $25 million of SkyBridge’s funding, and will go live to outside investors who can invest a minimum of $50,000 on January 4.

After bitcoin’s 200% rally this year, investors may be hesitant to buy the cryptocurrency right now in fear that a post-rally pullback is on the way. But Scaramucci said bitcoin is in its “early innings,” and he wants to get in before the price soars even higher.

“We could be at the precursor of an avalanche of institutional investors heading in,” Scaramucci said in a Tuesday CNBC interview. He added there may be a large swath of investors buying bitcoin in the first quarter of 2021 because they didn’t want to put it on their balance sheets in 2020.

Read more: The CIO of a new crypto fund that has returned 220% to investors this year explains why bitcoin topped $20,000 for the first time ever this week – and shares another digital currency set to become the ‘asset of the year’ in 2021

The SkyBridge Capital founder also said bitcoin will be a “very strong asset class” over the next decade given the monetary supply and current central banking coordination. 

SkyBridge joins a growing group of institutional players that are acknowledging bitcoin’s legitimacy as a store of value. Last month, Guggenheim filed to reserve the right for 10% of its $5.3 billion Macro Opportunities Fund to invest in the Grayscale Bitcoin Trust.

Other firms like MassMutual have invested in the cryptocurrency as well. Meanwhile, billionaire investors such as Stanley Druckenmiller and Paul Tudor Jones have  publicly discussed their bitcoin purchases.

Read more: BANK OF AMERICA: Buy these 16 medtech stocks with strong fundamentals that are set to soar post-pandemic

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