Investors will have to accept the trajectory and level of volatility in bitcoins as the digital currency becomes more widely accepted worldwide, according to SkyBridge Capital’s Anthony Scaramucci.
After a record high of more than $ 63,000 in April, the price of bitcoins plummeted in a matter of weeks – at one point even more than half of those earlier highs. Still, it has earned more than 10% since the beginning of 2021. At 2:35 a.m. Wednesday, the price of bitcoins was $ 33,744, according to Coin Metrics.
Skybridge Capital has “about $ 500 million” in bitcoin, according to Scaramucci, the company’s founder and managing partner, as well as a CNBC contributor.
He said bitcoin was still in the early stages of adoption and would become a “substitute” for gold, adding: “We actually like the uptrend and are ready to accept the variability in bitcoins.”
The largest cryptocurrency by market capitalization, according to CoinMarketCap, bitcoin is often presented as a potential rival to gold as a long-term stock of value. Currently, however, the price of bitcoins tends to be exponentially more volatile than that of gold.
“If you go back to Amazon’s IPO in 1997, if you hold that shareholder, $ 10,000 from that shareholder on his IPO now costs $ 24 million. But you would be subject to eight periods of time when stocks fell by at least 50 % because it was scaled according to Metcalfe’s law, “he said.
Metcalfe’s law states that the value of the network is proportional to the square of the users. Skybridge’s research department expects bitcoin users to reach one billion by 2025 from 125 million at the moment, Scaramucci said.
“Think of the telephone system as early as the early 1900s, when people started buying these phones and connecting with each other,” he said. “This is something that is happening with bitcoins right now.”
“I am very confident that we will sit here in a year or two and talk about this volatility, but we will also be amazed by the upward trajectory of bitcoin over the next 24 months,” Scaramucci said.