Anthony Scaramucci on bitcoin and its potential to replace gold
Investors will have to accept the trajectory and level of volatility of bitcoins as digital currency becomes more widely adopted globally, according to Anthony Scaramucci of SkyBridge Capital.
Next to a reach an all-time high above $ 63,000 in April, the price of bitcoin fell rapidly in a matter of weeks – at one point more than half of these previous peaks. Still, it has gained more than 10% since the start of 2021. As of 2:35 a.m. ET on Wednesday, the price of bitcoin was $ 33,744, according to data from Coin Metrics.
“I’ll point out that bitcoin is still up year-over-year, so it’s actually a really good performance this year,” Scaramucci told CNBC’s “Capital Connection” on Tuesday.
Skybridge Capital has “roughly $ 500 million” in bitcoin, according to Scaramucci, founder and co-manager of the company as well as a CNBC contributor.
He said bitcoin is still in its early adoption stage and is poised to become a ‘replacement’ for gold, adding: “We actually like the characteristics on the rise and are ready to accept the volatility of bitcoin. “
According to CoinMarketCap, the largest cryptocurrency by market cap, bitcoin is often touted as a potential rival to gold as a long-term store of value. Right now, however, the price of bitcoin tends to be exponentially more volatile than that of gold.
“If you were to return to from amazon IPO in 1997, if you owned that stock, $ 10,000 of that stock when it went public is now worth $ 24 million. But you would have gone through eight time periods in which the stock fell by at least 50% as it moved, according to Metcalfe’s Law, ”he said.
Metcalfe’s law states that the value of a network is proportional to the square of its users. Skybridge’s research department expects bitcoin users to reach 1 billion by 2025, up from 125 million currently, Scaramucci said.
“Think back to the phone system from the early 1900s when people started buying these phones and connecting with each other,” he said. “That’s sort of what’s happening to bitcoin right now.”
“I’m very confident that we’ll be sitting here in a year or two and talking about this volatility, but we’ll also be amazed at how bitcoin’s upward trajectory over the next 24 months,” said Scaramucci.