x
In brief
Anthony Scaramucci’s fondness for talking famously led to him getting fired as White House Communications Director after just 11 days. Now, his hedge fund is talking up Bitcoin, which should only help it as it looks to lure investors.
Scaramucci’s hedge fund, SkyBridge Capital, which started trading on December 22 with $25.3 million in Bitcoin, has officially opened its Bitcoin fund to accredited investors. (According to Scaramucci, the hedge fund as a whole has over $300 million of funds in the BTC market.)
“The Mooch” has been publicly toying with opening a digital assets fund since August 2020, when the price of Bitcoin was around $11,500. The Wall Street veteran told CNBC late last month that the move of institutional investors such as Michael Saylor to Bitcoin sealed his decision.
Those investors see Bitcoin as a hedge against inflation and as a long-term store of value, like gold.
According to SkyBridge’s pitch to investors, however, “Bitcoin is better at being gold than gold.” On eight metrics—scarcity, transferability, storability, decentralization, durability, fungibility, verifiability, and divisibility—SkyBridge ranks Bitcoin equivalent to or better than the mineral.
Your daily dose of cryptocurrency news, learning, gossip, and discussions. Listen
For instance, whereas gold is difficult to transfer, Bitcoin can be sent nearly instantaneously with a computer. While gold has a limited supply, Bitcoin’s supply is fixed; no new mineral veins of BTC can be discovered.
"With global money printing at an all-time high, Bitcoin offers a strong alternative to gold as a store of value and hedge against future inflation," said SkyBridge Co-Chief Investment Officer and Senior Partner Ray Nolte via a press release.
The SkyBridge Bitcoin Fund gives accredited US investors—those with regular annual incomes of at least $200,000—exposure to Bitcoin in exchange for a management fee of 0.75%; the minimum investment is $50,000. The hedge fund argues that, because banking and brokerage apps pose security risks, “investment funds represent the safest way to invest to gain exposure to Bitcoin.”
SkyBridge is also looking to assure investors that the current Bitcoin bull run is far from over. Noting that gold’s market capitalization is roughly $10 trillion and Bitcoin’s is $500 billion, SkyBridge estimates that “if Bitcoin achieves the same market capitalization of gold, the price per Bitcoin will be $535,000.”
Bitcoin may not have hit half a million yet, but it’s heading in an upward direction. When the fund began trading on December 22, a single Bitcoin sold for about $23,800. The price has since jumped to above $31,000.
Of course, as Scaramucci knows, what quickly goes up can just as quickly come down. But for now, this is a type of volatility he can enjoy.
