SkyBridge Capital’s Anthony Scaramucci told CNBC on Thursday he believes bitcoin can continue to move higher over the long-term and eventually with fewer wild swings, as adoption picks up. He likened his outlook for the historically volatile cryptocurrency to shares of Amazon.
Scaramucci made the comparison in response to a question from “Squawk Box” co-host Andrew Ross Sorkin, who asked the hedge fund founder what will happen to the price of bitcoin if, eventually, early investors decide they can no longer generate outsized returns, prompting them to sell and buy another fledging asset they see as poised for big gains.
“Bitcoin is 12 years old. But if you bought Amazon after the 12th year, you got a 64x return on your money from 2009 to 2021,” Scaramucci said, explaining that Amazon’s massive gains in its first 12 years — gaining over 3,600% from its May 1997 IPO to May 2009 — did not preclude the stock from soaring higher in its next dozen years.
“Amazon now, 20 years later, is trading with more stability. It got a very big pop because of the pandemic, but just take a look at its long-term chart, and I think that will happen to bitcoin,” he said. “Once it fully scales … you’re going to be looking at that situation and saying, ‘OK, it’s way less speculative.'”
Bitcoin, which was created in 2009, has experienced a meteoric rise since inception and in recent months. It traded around $58,000 per coin Thursday morning. But just six months ago, it was priced at roughly $11,000. This year alone, the world’s largest cryptocurrency by market cap has nearly doubled, according to Coindesk data.
Total supply of bitcoin is capped at 21 million. Roughly 18.66 million coins are in circulation now, Coindesk data shows. Proponents see bitcoin’s predetermined supply limit as one reason why its price can continue to rise as more investors seek ownership.
Bitcoin has been prone to wild price swings in its history. In 2017, it mounted a big rally and traded at nearly $20,000 per coin in December of that year, its record high at the time. But then in 2018, in what’s become known as the “crypto winter,” bitcoin lost about 80% of its value.
Some bitcoin bulls see the current run as different due to increased institutional adoption.
For example, companies like Tesla and Square have bought the digital coin with cash on their balance sheets; Mastercard intends to open up its network to some cryptocurrencies later this year; and Morgan Stanley is set to become the first major U.S. bank to grant its wealth management clients access to bitcoin funds.
Skeptics question whether bitcoin is an efficient means of transaction or even a durable store of value, as proponents argue it is.
“As a collectible, it’s gone up a lot, but it’s not gone up at the right times,” New York University finance professor Aswath Damodaran told CNBC on Tuesday. “In fact, last year, when stocks were collapsing, bitcoin went down even more. That’s not what you want in a collectible,” he added.
Damodaran, known as Wall Street’s “Dean of Valuation” for his company analyses, stressed he’s not opposed to the idea of cryptocurrencies outright. “I think there will be a good cryptocurrency. I just don’t see how bitcoin can be it.”
Scaramucci, whose firm has a bitcoin fund, said bitcoin remains in its “transitory period,” like in the early days of Amazon shares. However, he said some of bitcoin’s fundamental characteristics — such as running on a distributed digital ledger known as a blockchain — have been key to its market cap skyrocketing.
“Bitcoin got to a $1 trillion faster than all those companies, primarily because its decentralized, so now you’re taking all that C-suite drama and all the politics associated with it, away from it,” he said. “It’s a fully scaling, monetary network and store of value and it’s going to get there over the next 15 years.”
Earlier this year, Scaramucci told CNBC he believes bitcoin will reach $100,000 per coin by the end of 2021.
