Name: Balancing the Ledger: Anthony Scaramucci talks new Bitcoin fund, GameStop, and Biden
Uploaded: 2021-02-02
Duration: 14 min 35 s
Description: SkyBridge Capital launched its Bitcoin fund in January of 2021.

Balancing the Ledger: Anthony Scaramucci talks new Bitcoin fund, GameStop, and Biden

Jeff Roberts, Jen Wieczner, Anthony Scaramucci

Fortune_Crypto

SkyBridge launched its Bitcoin fund in January of 2021.

Anthony Scaramucci talks Bitcoin fund, GameStop, and Biden

SkyBridge Capital launched its Bitcoin fund in January of 2021.

Watch: Anthony Scaramucci talks new Bitcoin fund, GameStop, and Biden

Today we are joined by Anthony Scaramucci, the founder and managing partner of Skybridge Capital, also nicknamed the Mooch. Welcome. Anthony, Thank you so much for being here. So you recently launched the Bitcoin fund and have started buying Bitcoin for skybridge capital. Tell us a little bit about when that started. Um and, uh and where you got it? Oh, well, I mean, we we've been looking at Bitcoin for the last three years after my debacle in the White House. When I got back to the firm, I registered the u. R l skybridge Bitcoin dot com. I wasn't ready to pursue Bitcoin until a couple of things became clear. The first one was I thought you needed exponential growth in the network, meaning you have to have a lot of users of Bitcoin. There's now over 140 million people that only own Bitcoin. Secondarily, I thought that there was a need for some level of regulatory rubric around it. We were We were getting that as early as 2017. But we haven't more robustly today and then the third thing, which was super important to us because we're institutionalist more than we are Bitcoin Ear's, which are classically libertarian. Uh, we needed a place to store our coins where we felt it was safe. And so all of those things came together in 2020 and we started making our first investments on behalf of clients in October November. That was sort of in the 15 to 18,000 per coin zip code. We then opened up once we got regulatory clearance and we got the paperwork done on a Bitcoin specific fund were Bitcoin only if you will, uh, we launched that on December 22nd with our own capital. The firm put up about 25 million into that fund. This way, clients would be assured that we were eating our own cooking, and we opened it up to outside investors on the Fourth of January. And so so far. That's also been pretty good entry points as well. And we're very happy with where we are, jump in and just ask you to make the case for such a fund because some people tell me what's the point? Why not buy it directly? I know some institutions by laws that require them to, you know, perhaps not do that but it seems in the long run. Pretty soon there'll be an E T. F will be regulatory permission to just buy it directly. So why go to a fund like yours? Well, you know, listen, I think if you get an e t. F or a mutual fund, you should definitely go in that direction, and you should not buy our fund. But if you're comparing it to buying it on certain exchanges or certain Internet platforms, there's some fishing. It's to those Internet platforms meeting where people are fishing people over the Internet. There's been some steps. There's been some security issues. Apple just disclosed on their latest upgrade on their phones that there may be an encryption security issue there. And so what? I would tell people if you were going to buy and scale, and by scale, I mean 25. 50,000 or more. You may want to pay us our fee to get our safety to get the layer of defense from our accounting and legal team and the fidelity cold storage of your Bitcoin. And if you believe that point directionally is going where we think it is, uh, the charges that were charging 75 basis points is the minimus. Moreover, Michael Sailer is having an event related to institutions and corporate treasurers about putting some Bitcoin on their balance sheets similar to what Michael strategy is done. And if you understand the Gap accounting laws there, it is better for people to put it into a limited partnership structure. So then, whatever the prices of that limited partnership, they can put on their statement if they buy Bitcoin directly because of the way it's treated from a tax purpose. It's an intangible on their balance sheets, so they have to market at the price that they paid for it. They can't mark it up if it's going up, but if it goes down, they have to mark it down. So they sort of have this asymmetry from an accounting perspective. So those are some of the reasons why you would be with us. I'm merely telling people this is a cheap access point in the current regulatory rubric to buy Bitcoin in size. And if you do get to an e t f. And it's anybody's guess when that e. T. F comes. But if you get to a TTF my guess is that these coins will have appreciated a lot because there'll be lots of demand, uh, to meet those E t s or those mutual funds. And I would like to get my clients in position before those things. What is your expectation for a potentially TF and is that your end goal? I mean, we'll see average offer those options that they are become legal. Uh, well, I would I'm probably more inclined to the mutual fund side of it than the e t f side of it. Uh, again, just nuances there, and e T. F is a daily trading or daily liquidity. The e T f. You can trade inter day, and so I think skybridge is more equipped to handle the mutual fund aspect of it. Then the e t f there will B E. T s. And as we all know, E t s and mutual funds do coexist in the current market place. And so some people like CTS vs mutual funds or vice versa. But there's market share for both of those products. And yes, we will be filing for a mutual fund. Uh, it's anybody's guess, Jen, when those things will be acceptable for the SEC. But here's the thing. If we're right about the direction of Bitcoin and we sort of feel like Bitcoin could easily be $100,000 per coin by the end of the year. And there's no e t f that I don't want clients to wait for that e t f. I would rather have them positioned in our fund. And then we could look at the landscape. Once the regulatory rubric in the United States evolves and becomes, it becomes more acceptable, as it happens at the end of the year. How do you get to that number? Well, you know, it's really based on making an assumption of whether or not you believe Bitcoin is a store of value, and it's based on the exponential growth of the network and for us. When we look at Bitcoin from a fundamental perspective, I would make the case to you guys that it is a decentralized monetary network. Apple is a computer network, if you will, and it coexists on its platform with other services. If Google is an ad and search network, Amazon is a retail network. Facebook is a social network well Bitcoin over the last 12 years has become a decentralised monetary network with 100 and 40 plus million users, and you can look through Bitcoin, and I think it's really priced in a number of different ways. But the one way that we think is the most likely way it's priced is users and the exponential growth of users. And so as the users grow, we do believe the price will grow. And if we're right about its acceptability standard and it becomes like digital gold, if you will, a store of value. Well, then, if you look at the math, gold is trading at 78 $9 trillion. It depends on the trading day. Bitcoin is in the 5 $600 billion own. Uh, just going to a trillion and a half to $2 trillion would be an easy move for Bitcoin. Uh, if you get that demand, if you get that level of acceptability and things are happening now that is evidencing that endowments have announced that they own Bitcoin like yeah and Harvard, uh, groups like Black Rock have said that they've made it acceptable now for their fixed income funds to own Bitcoin or Bitcoin futures, and I think that is starting to happen. We're still in the early adoption phase of the S curve. So over the next 6 to 12 months of those things evolved. I think a price target of 100,000 is very doable. And they sure like going on the market these days from the flight to Bitcoin and all that. But I'd like to just approach current events for a second. What's going on with Robin Hood and their decision to suspend trading in the Civil Reddit shares like Gamestop and stuff like that? Your hedge fund guy. So who are your sympathies with your sympathies with the hedges or retailers? Or you know who is doing the right lung thing out there? All right. Well, Jeff, I'm an unusual guy because I grew up in a blue collar family and my dad was a crane operator. Nobody went to college until my brother and I got there. So my sympathies are always with the common person, you know, and I'm a little bit of a libertarian. Having said that, it's fully disclosed. I have about 10% of my money with Steve Cohen. He's a personal friend of mine. I sold him my interest in the New York Mets at the back end of 2000 and 20. And, you know, we have several $100 million with Steve. He's down as we're speaking, probably seven or 8%. He got down as high as 12 and a quarter as a result of the short exposure that he has through, um, Melvin Capital, but also his own balance sheet related things like Gamestop. So, um, you know, my my heart is with the people. My wallet is with Steve. Uh, and you know what I will say to you is that they made a mistake. Robin Hood did. And these other trading platforms by blocking that because all that does is it enforces or reemphasizes to common people that the system is rich and we can debate whether or not there should be a bee swarm attack, uh, to blow out a short position and to crush hedge fund managers that have heavy short interest. We can debate that whether it should be allowed or not. But under the current rules, it is. And so pulling the plug on these people, you have a situation where representative Ocasio Cortez and Senator Ted Cruz are a little bit of an odd couple. Ideologically, they are both in agreement that there needs to be some type of congressional investigation into what Robin Hood is doing, and this could be a precursor to a potential transaction tax for Wall Street. I think that this was a mistake for them from a public policy perspective, Uh, and I don't think you can change the rules fairly admits drink. So whether you like what happened or you dislike what happened, I think the the outcome from a policy perspective is a disaster for Robin Hood and for broad swaths of Wall Street. Speaking of policy, you were involved obvious. Bruce Lee in the Trump administration. What are your expectations now for the Biden administration, or whether you're hope? Um, what do you hope to see from them? Well, first of all, I think they I think I think President Biden has shown his centrist ST Gen uh, this notion that the radical left is going to take control of him or he's going to be a puppet of the radical left. I think it's unfounded. Uh, 7 to 10 days into his administration and just look at the pics of his Cabinet. Somebody like Secretary yelling as an example. I applaud her career. I applaud her policy vision. I think she is, by and large a centrist, and she also recognizes the need to be dovish. In a situation like this, where we're imperiled economically, a stock market might be doing well, but middle and lower income people and service centre jobs like restaurants, the entertainment sexual like Wall Street have been devastated. I think having people like her in that position is very good. Long term for the markets. Uh, and so I will make a prediction. I think that they will be lighter touch on regulation than the Obama administration. I don't know if they're gonna be where the Trump administration has been over the last four years, but I do think that they learned something, frankly, from the Trump administration and in my dealings with Obama and Biden, economic team slash staffers. I've made the point that you gotta let businesses, you know, run a little bit and you've got to trust business executives around our country because hopefully if you do that, you'll create more jobs. I certainly don't want them to stifle business. I think that was one of the criticisms of the Obama administration. It was, frankly, one of the benefits of the Trump administration. I want to be fair to the Trump administration. I've been publicly critical of what they've done. Uh, the the regulatory rubric, I think, was good from a business perspective, and I'm hoping that the Biden administration learns from that. One more quick question asked me the next big milestone in crypto. It's like they're going to be the coin disciple, which is going to happen in February. Um, what's the evaluation? Could be, uh, 50 billion shares are reportedly trading around 200. Um, what do you think? He ended up with a fair evaluation, too? Well, it's going to trade higher than I think. Let's just hold up your book, by the way. Look at that. I got a copy of your book here. Okay, Look at that. There's there's power in pink, Jeff. God bless you. Uh, I think these guys have built a brilliant business. I'm halfway through your book. You have a brilliant exposition of the personalities that have driven the early stages of this business that have helped the mainstream digital currencies and so yes, couldn't trade to a $50 billion market cap. I do think that, but because of the low interest rates because of what is happening in this decentralization movement, Gamestop, Bitcoin, Ethereum, etcetera I think it's going to have a higher evaluation than that. If I could buy into the pre I P o secondary market on something like Coin Base, I would put a lot of money in that. Well, that sounds foolish. Your net short game stop. But it sounds like overall pretty, pretty bullish on the market. I am bullish on the market. I'm accidentally net short game stop. I didn't I didn't think you'd have that much Gamma or that high level of in predictability of where that short would go. But the good news is we have a diversified portfolio is not really hurting us. We're up this month and the month of January despite the Gamestop situation, and I think that is the message I'd like to leave everybody with. Even in Bitcoin, we have small amounts of Bitcoin. We're big believers, but I'm not, uh, betting the ranch so to speak, and I'm not irresponsibly long Bitcoin. I think it's a prudent strategy, however, at this point to have some of it. That's a great note to end on. Anthony, Thank you so much for being here. It's going to be a good luck with your book, Jeffrey. Thank you. Alright. Holding it up there and I'm Jeff Roberts to more balanced and leisure to got a fortune dot com.