Scaramucci says Bitcoin is "something people need to think about" as a long-term, "multiple-decade holding," comparing it to Berkshire Hathaway as a "value-store." He notes those not "doing the deep dive homework" on Bitcoin are missing out on its potential benefits.
Driving the Bitcoin rally is "the limited supply" combined with "the wild amount of demand," Scaramucci explains. With only around 900 new coins mined daily, a number that halves periodically, Scaramucci says "there's simply not enough" Bitcoin to meet market appetite.
While some are investing due to fear of missing out, Scaramucci believes "there's another segment" that understands Bitcoin's "network effects." As adoption grows, he sees it becoming "a form of digital gold," advising those caught up in the hype to simply "stay patient." Though volatile historically as "an early adopting technological asset," Scaramucci draws parallels to big tech stocks, noting "we saw Amazon lose 50% of its value eight times."
On politics, Scaramucci argues a second Biden term with restored democratic norms would benefit Bitcoin investors, contrasting another Trump presidency who would likely "destroy the institutions of democracy."
But yes, I mean, trade fight people wouldn't like that. I think Mr. Buffett-- I know Charlie Munger hated Bitcoin. And Mr. Buffett's called it rat poison. But I have typically found that people that are not focusing on it and are not doing the deep dive homework feel that way. But after you do the homework on it, you sort of fall into the rabbit hole of Bitcoin. And it's a one-way ticket towards Bitcoin.
I know very few analysts that have actually taken the time to understand Bitcoin and then have said, OK, you know, that's not for me. I've yet to find somebody like that.
- Anthony, it's great to have you on the show. Let me get your take, Anthony, on what you see as kind of driving the rally we're seeing here. Is it strictly, Anthony, you know, new ETF inflows or other factors at work?
ANTHONY SCARAMUCCI: So great to see you too, Josh. I think what's happening, not to be overly simplistic, is that you have a limited supply. And you have a very wild amount of demand right now. Now it's interesting. A lot of people are trying to figure out where the demand is coming from. Is this retail demand? Or is it institutional demand?
Our best guess based on an analysis that it's still being retail driven, although there are now pockets of institutional investors that are coming in. You know, we have reason to believe that there's more than one sovereign wealth fund now in the Bitcoin story buying Bitcoin, either buying it through the ETFs or buying it and holding it in a secure wallet.
So you just don't have enough Bitcoin out there. There's not enough Bitcoin on the exchanges. And of course, not to bore people, I'm happy to explain the halving cycle if you have time. But just the point is sometime in mid to late April, arguably April 20th, the network is spitting out 900 coins a day. That gets cut in half to 450.
And so that will once again decrease supply at a time where there's a lot of demand for it. So, you know, the SkyBridge intrinsic value model at this point is about 110,000. We do think that this will get to 170,000 four quarters after the halving. So yeah, people think we're nuts. And that's fine. But I don't think we're nuts. And that's why we have such a big position.
- And, Anthony, you know, how powerful do you think is also kind of just the feeling that retail investors get in because, as I wrote recently, number go up because they think-- I mean, it's price chasing. It's FOMO. It's whatever you want to call it that people feel like they're going to get rich by putting money in this thing.
ANTHONY SCARAMUCCI: Well, listen, Julie, we both market psychology and human psychology. And I'm certain that there's a large segment of the population that's just doing that. And they're chasing it. But then there's another segment of the population, which would include people like Cathie Wood or Tim Draper, people like Paul Tudor Jones that have done an enormous amount of homework on Bitcoin and understand its network effects and understand that as it scales-- and we're only at about 5% adoption, which puts us roughly at 1999 for Web1.
And so those people that have really done the fundamental homework on this thing know that as it scales and it gets adopted, it becomes this hard asset. It becomes a form of digital gold. And again, I'm not saying it becomes the world's reserve currency. There are Bitcoin maximalists that believe that.
All SkyBridge is suggesting is that it should trade to the market capitalization of gold. Bitcoin's at about 1.3 trillion right now. Gold is roughly 14 trillion. Could Bitcoin be 10 times where it is today? We believe that it could be. It'll probably take 6 to 10 years to get there.
And so yes, I hear you. There's short-term people in there. There's loose holders. I watched with amazement in January loose holders of Bitcoin selling their Bitcoin to the likes of BlackRock and other large scale ETFs in the high 30s, low 40s. And I would just caution people that understood the Bitcoin story or who have accidentally gotten into the Bitcoin story to stay patient.
- Anthony, on the flip side, man, patience can hurt sometimes, can it? You know that very well from the dip that we saw in crypto, right? The whole FTX situation, which I know you were invested in to some extent as well. So how do you invest in this thing knowing that, OK, maybe it goes to 170,000. But then does it go back to 15,000 or what-have-you. In other words, it's a volatile asset.
ANTHONY SCARAMUCCI: It's a good question. I would say this to you, that we took a lot of heat when our Bitcoin position rolled over. We made our first Bitcoin purchases in November of 2020 between 17,000 and 19,000. They got up to 69,000. They round tripped back to 17,000.
We went from heroes to dunces over that period of time. I don't think we're that smart or that dumb. I just think that this is an early adopting technological asset, only 5% saturation. And so concomitant with that, Julie, is a lot of volatility.
I would take people back to the early days of Google, Facebook, early days of Amazon. We saw Amazon lose 50% of its value eight times. And in one time in the 2000 tech bubble debacle, it lost 90% of its value.
So these things are volatile. I tell investors and clients, own a small piece of this. This is not something you have to own 20% of your portfolio in. But if you add a 1% to 3% position, I think you'd end up doing very well. And I think it would reward you because run a regression analysis. It's a non-correlated asset. And I think over time, it will prove to be a non-correlated asset in the future.
- And, Anthony, we're talking Bitcoin here. But I want to switch to another subject you're very familiar with, which is politics. You know, you're not a never Trumper, Anthony. Clearly, I mean, you worked for Trump. But you don't--
ANTHONY SCARAMUCCI: Yeah, people say-- yeah, exactly. Yeah.
- But you don't want him in the White House again, right? So I'm interested, though, Anthony. Are you, therefore, suggesting that you think Biden, if he was back for a second term, that would be a positive for Bitcoin?
ANTHONY SCARAMUCCI: OK, so there's a lot of different things there, OK? So we're talking specifically for Bitcoin. I think macro, yes, because whether you like Mr. Biden or dislike him, he's for the rule of law. And he's for the democratic processes of the United States. Last time I checked, he didn't try to insurrect the American government after losing an election. And he wasn't caught on tape trying to do that.
And so I know that trial is going to be delayed. But the American people need to know the facts. You know, Mark Meadows, the former White House chief of staff and a conservative member of the House Freedom Caucus, is the chief witness against former President Trump.
So to me, I tell bitcoiners, you are at risk if you get somebody that wants to destroy the institutions of the democracy, the separation of powers, and the constitution. The country has been made great. It is great. It doesn't need to be made great again. It is great. And it's primarily great because of the traditions in the country, the democracy, the flat decentralized system of government at the top.
You get Mr. Trump in there. He's made it very, very clear that he wants to persecute journalists that don't like him. He wants to pull FCC licenses of people that are critical. He said he's ready to empower the Department of Justice and go after his political adversaries. He's made all of this very clear. And he's also on tape saying, hey, I'd like to stay in power, let's see if we can flip this somehow. And of course, they've got his attorneys on tape conspiring to create fraudulent electors in the electoral college.
So I know he's on a good run right now. I understand politics reasonably well. Michael Dukakis was 10 points ahead of George Herbert Walker Bush at this time in 1988. Mr. Trump is going to lose this election. Joe Biden will get re-elected.
And that will be generally good for the markets, which are at an all-time high, I might point out, during the Biden administration. But it'll also be very good for bitcoiners because you may not like the regulation coming out. But at least there's a predictable process to the law. And we'll continue to beat the Biden administration in the court system of the United States.
And so I just want to remind people of that. Moreover, I think the Democrats are finally getting the message. Even Elizabeth Warren herself is starting to get uptight about the 73 million Bitcoin or crypto wallets that are in America right now.
- Anthony, it was great to have you on the show today. Thanks so much for your taking the time to share your insight. I appreciate it.
ANTHONY SCARAMUCCI: Good to be on. Thank you, guys.