SkyBridge Capital's Scaramucci believes that Bitcoin won't hedge inflation until it hits 1 bn wallets
Anthony Scaramucci thinks Bitcoin is not mature enough to be regarded as a potential inflation hedge
By Shashank Bhardwaj
Anthony Scaramucci of SkyBridge Capital. Image: Brendan McDermid/Reuters
Anthony Scaramucci, the CEO of SkyBridge Capital, believes that Bitcoin is an attractive asset but not yet an inflation hedge. SkyBridge Capital is a firm that specialises in global investment management. Scaramucci stated that Bitcoin has not yet reached ‘wallet bandwidth’. It is worth noting that he is well-known for his bullish views on Bitcoin.
According to a public statement made by Scaramucci on Wednesday, August 22, "Until you get into the billion, billion-plus zone, I don’t think you’re going to see Bitcoin as an inflation [hedge] as it’s still an early adopting technical asset."
The exact number of Bitcoin wallets in the world is unknown. Estimates place the figure at around 200 million. The crypto selloff, combined with the broader market downturn, has left Scaramucci's SkyBridge Capital's flagship fund of funds down by 25 percent year to date through the end of July. When discussing Bitcoin, the former White House communications director stated that he does not believe the crypto can protect investors from macroeconomic conditions. He is, however, confident that the asset will arrive on time. He was quoted as saying, "When I bought my first BTC, it was about 80 million wallets, according to Glassnode; there’s probably 300 million wallets globally today."
Scaramucci stated that he is still bullish on Bitcoin and the overall crypto market, citing BlackRock's recent decision to launch a new private spot Bitcoin trust with Coinbase as the custodian. This indicates that the leading crypto has strong institutionalised demand. However, he stated that the majority of people are unaware of the significance of BlackRock's involvement in Bitcoin.
Because of its limited supply of 21 million coins, some hailed Bitcoin in its early days as a potential inflation hedge. However, as stock and Bitcoin have been shown to be inextricably linked, that belief has waned. As Scaramucci said, "Bitcoin is still not a mature enough asset to be regarded as a potential inflation hedge."
He went on to say that the markets now have a lot of short positions. This could result in people having their 'faces torn off when they least expect it’. However, according to Steven Lubka, managing director of private clients at Swan Bitcoin, BTC should still be viewed as an inflation hedge. He stated that Bitcoin failed to act as an inflationary hedge during this year's global inflation events. This is because he believes that supply shocks, rather than monetary expansion, have been the primary cause of inflation. In the event of monetary expansion, Bitcoin can provide a more effective hedge against inflation.
The writer is the founder at yMedia. He ventured into crypto in 2013 and is an ETH maximalist. Twitter: @bhardwajshash
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