Bitcoin ETFs from Fidelity and Skybridge Capital are under review by the SEC

Anthony Scaramucci
Anthony Scaramucci’s SkyBridge Capital is waiting on SEC approval of a bitcoin ETF.

  • Bitcoin exchange-traded fund applications from Fidelity and SkyBridge Capital are under review by the Securities and Exchange Commission.
  • The SEC is currently looking at four other applications to launch bitcoin exchange-traded funds.
  • A decision on asset manager VanEck’s application is expected in June.
  • See more stories on Insider’s business page.

The Securities and Exchange Commission is reviewing applications for bitcoin exchange-traded funds filed by Fidelity and SkyBridge Capital, the hedge fund founded by Anthony Scaramucci.

The SEC is examining a request from Fidelity Investments to launch the Wise Origin Bitcoin Trust, according to a filing dated May 25, and it is looking at SkyBridge’s petition to start the First Trust SkyBridge Bitcoin ETF Trust, according to paperwork dated May 21.

The moves expand on the regulatory agency’s review of other potential bitcoin ETFs. The US has yet to approve a cryptocurrency-based ETF. Money management firms are seeking to capture potential gains from exposure to bitcoin, which has been pulling in more interest and activity from institutional and retail investors and companies.

Scaramucci’s SkyBridge is working with investment firm First Trust Advisors on the ETF project and in March filed for regulatory approval. If greenlighted, the ETF would trade on the New York Stock Exchange Arca, which specializes in exchange-traded listings.

Fidelity also in March submitted paperwork to launch a bitcoin ETF to track the digital currency’s performance. If that wins SEC approval, shares of the Wise Origin Bitcoin Trust would trade on Cboe Global Markets.

Investors are waiting to hear from the SEC if it will grant clearance for bitcoin ETFs from Kryptoin, Valkyrie, WisdomTree, and VanEck. Applications for about 10 others ETFs are pending, according to CoinDesk.

The SEC in late April said it expected to release its ruling on VanEck’s application on June 17. The agency said it was delaying the decision to take an “appropriate” amount of time for the review. A review period can be extended for up to 240 days.

Read more: A crypto expert shares the top tips to pick worthwhile NFTs in a landscape littered with scams – including how to avoid getting caught up in Reddit-fueled hype that can cost you millions of dollars.

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

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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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Bitcoin could be like the FAANG stocks for the next decade – but it will take more than the buy-in of the retail army to get it there, an investment chief says

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“It’s going to require institutional capital.”

  • Bitcoin could become the next “great tech stock” of the coming decade, an investment chief said.
  • But only retail traders buying into the coin won’t be enough, according to Skybridge’s Brett Messing.
  • “It’s going to require institutional capital,” he said. “Retail can’t get it there.” 
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Bitcoin could become what Tesla, Facebook, and Google were for the last decade, according to Brett Messing, partner and chief operating officer at Skybridge Capital.

The investment chief explained that just like three of those tech stocks were some forms of networks, bitcoin too is a monetary network. 

“Bitcoin is actually going to be the great tech stock over the next decade, in addition to being digital gold,” Messing said at a virtual roundtable discussion this week.

According to him, there are two potential outcomes for the digital token in the near future: either it could remain a niche asset and trade between $5,000 and $50,000, or it could grow to be a “real asset” that could easily hit as much as $500,000. 

But in order for it to get to even a quarter of that level, “it’s going to require institutional capital,” he said. “Retail can’t get it there.” 

Bitcoin was last trading at $$32,129 on Friday, almost $10,000 lower than its record high of $41,000 earlier this month.

“It’s now a $600 billion asset class. I think it is arguably beyond the point at which it can be manipulated, and I think as it matures, that will become increasingly the case.”

SkyBridge Capital, run by hedge fund manager Anthony Scaramucci, invested $25 million into a bitcoin-focused fund that went live on January 4.  The “SkyBridge Bitcoin Fund” was launched so that the fund got in before bitcoin’s price soars even higher.

The firm’s flagship fund is a $7 billion Registered Investment Advisor (RIA), but for the purpose of managing the bitcoin fund, it isn’t acting as one. “By doing that, we don’t have to satisfy what’s called a custody rule under the Advisers Act,” Messing said, referring to the issue of custody service by hedge funds who hold large amounts of cryptocurrency.

But he expects Gary Gensler, President Joe Biden’s pick to run the US SEC, to be “very bitcoin-friendly,” and that one of his first acts will be to provide clarity on the custody role.

In terms of risks to bitcoin, government regulation is by far the biggest. Just like it is for technology companies.

Messing said: “If you talk to… what is Mark Zuckerberg worried about? What is Jeff Bezos worried about? The thing they worry about the most is the government, and that’s the first concern.”

A breakdown in infrastructure is another point of concern since bitcoin makes big moves everyday on exchanges that could falter.

Lastly, there could be a greater risk that no one is prepared for.

“We’re trying to be crypto-hip, but whoever knew that we’d be sitting here in a pandemic on Zoom?” said Messing. “No one predicted this. I imagine the risk for Bitcoin is one that none of us are going to identify.”

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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.
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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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