According to SkyBridge Capital’s Anthony Scaramucci, investors will have to accept the development and volatility of Bitcoin as the digital currency becomes more widespread around the world.
After rising to an all-time high of over $ 63,000 in April, the Bitcoin price fell rapidly within a few weeks – in the meantime even more than halved from these previous highs. Still, it’s up more than 10% since early 2021. On Wednesday at 2:35 p.m. ET, Bitcoin was priced at $ 33,744, according to data from Coin Metrics.
“I’d like to point out that Bitcoin is still in positive territory compared to the year, so it actually performed very well this year,” Scaramucci told CNBC’s Capital Connection on Tuesday.
According to Scaramucci, the company’s founder and co-managing director and CNBC employee, Skybridge Capital has “approximately $ 500 million” in Bitcoin.
He said Bitcoin is still in the early stages of adoption and will become a “replacement” for gold, adding, “We actually like the upside characteristics and are ready to accept Bitcoin’s volatility.”
According to CoinMarketCap, Bitcoin is the largest cryptocurrency by market capitalization and is often seen as a potential competitor to gold as a long-term store of value. Currently, however, the price of Bitcoin tends to be exponentially more volatile than that of gold.
“If you had gone back to Amazon’s IPO in 1997 if you held this stock, $ 10,000 of that stock is now worth $ 24 million when it goes public. But you would have exposed yourself to eight periods of time in which the stock rose at least 50 % has fallen as it was scaled by 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 division expects Bitcoin users to reach 1 billion by 2025 from the current 125 million, Scaramucci said.
“Think of the telephone system in the early 20th century when people started buying these phones and connecting to each other,” he said. “That’s what’s happening with Bitcoin right now.”
“I am very confident that in a year or two we will sit here talking about this volatility, but also be amazed at Bitcoin’s uptrend for the next 24 months,” said Scaramucci.