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SkyBridge Capital Founder on Crypto Market: “We Haven’t Sold One Position”

Former White House Communications Director Anthony Scaramucci, the founder and managing partner of global alternative investment firm SkyBridge Capital, spoke on the crypto market on Thursday.

SkyBridge Capital is “an SEC-registered investment adviser and global alternative investment manager that invests in hedge funds, digital assets, private equity, and real estate.”

In early 2021, Skybridge confirmed “the launch of the SkyBridge Bitcoin Fund LP, which provides mass-affluent investors with an institutional-grade vehicle to gain exposure to Bitcoin.”

According to the press release:

“Additionally, on behalf of its flagship funds, SkyBridge initiated a position, valued at approximately $310 million at the time of this release, in funds investing in Bitcoin during November and December 2020.”

A Cointelegraph report from April 25th mentioned that SkyBridge Capital “also has money deployed in other hedge funds, late-stage private tech companies and real estate, with its total AUM reported being around $7.3 billion.”

Scaramucci told Bloomberg:

“We made a decision during the pandemic that we had to relitigate our entire portfolio. There’s a pre-pandemic world and a post-pandemic world, and a post-pandemic world has a lot more government deficits—it has a lot more uncertainty related to growth… For us, we think the cryptocurrency markets represent tremendous growth. It comes with volatility, certainly, but I think over the three to five years, we’d like that trajectory.”

His statement continued:

“In March of 2020, Scott, when Bitcoin got down to between four and six thousand, there were 70 billion dollars lost, and so just to get the magnitude of what we’re talking about now, it’s an 800 billion dollar correction. But I think the good news about that frankly is because this is decentralized, you don’t have any systemic risk.

Secretary Yellen more or less said that this morning, and I just want you to imagine that kind of hit to the banking community, how dramatic that would be, and what the Federal Reserve would need to do. So it’s just an example of decentralization being what I would describe as less fragile than the core system…

Of course, we can draw the historical context back to March of 2000 when we saw the Nasdaq go from something like 5,000 and change down to 2,300. And so, if you had leverage in this situation, then you likely incurred a permanent capital loss, but if you didn’t have leverage in this situation, there were some anomalies that took place like the Terra debacle, where I think these assets are at distress level prices, they’re technically oversold.

And so, we haven’t sold one position, frankly… Still, our core fund has about 18% exposure to Bitcoin and Ethereum. And I’ll just point out to people if you bought this stuff when we did back in October of 2020, these coins, you know, were trading $18,000 or so for Bitcoin, $700 or so for Ethereum.

If you take a long-term perspective and sort of zoom out, you could do very very well in the cryptocurrency markets. Listen, everybody’s a short-term investor when you have losses like this. You know, that cliche I’m a long-term investor until I have short-term losses.

I understand the panic in the markets, but what I would encourage people to think about is the two core protocols, Bitcoin and Ethereum. zoom out, take a look at what they’ve done over a five-year period of time, and recognize that there was a flaw in the Terra ($LUNA) mechanisms.

Many people spoke out against this. SkyBridge never owned any of those tokens. And many people spoke out against that, and of course, when that crumbled, you saw massive selling pressure.

So, I think this thing is technically oversold. We’re long-term optimistic, and unfortunately, for me, Scott, I’m getting old. This is my eighth bear market cycle, and I just want to encourage younger people that are tuning in — perhaps, it’s their first or second market cycle — to see through the carnage and recognize that there’s an extraordinary opportunity ahead like there was in March of 2000.”

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