Buyers should calm down from concerns about the cryptocurrency and make some long-term investments instead, SkyBridge Capital’s Anthony Scaramucci told CNBC on Tuesday.
Some people consider Bitcoin to be “rat poison,” as billionaire Warren Buffett once described it; others say it’s the worst thing that could happen to civilization, Scaramucci said in a Squawk Box interview. “Everyone is a long-term investor until you have short-term losses, and then you start freaking out.”
“Take a chill pill, stay long Bitcoin, other cryptocurrencies like Algorand and Ethereum and I think you will be very well served with these investments in the long term,” the hedge fund founder added.
Bitcoin was back above $37,000 on Tuesday, a day after briefly falling below $33,000. Despite its surge, the world’s largest digital coin has been trading well below its all-time high of around $69,000 set in November.
Some crypto analysts fear the start of a “crypto winter,” like the bear markets in 2017 and 2018, when Bitcoin plunged about 80% from record highs at the time.
Scaramucci believes that Bitcoin buyers need to look at the bigger picture rather than asking what Bitcoin is currently worth compared to a US dollar.
“We are ahead of ourselves. When it’s 2025 and there are a billion bitcoin wallets, let’s call it a currency,” he said. “The dollar is still the dollar. To me, this is an emerging technology that will eventually become a business value as more and more people join the network.”
Scaramucci capped his enthusiasm with a warning that due to low adoption, bitcoin remains volatile, especially at large companies — Tesla being one of the exceptions. Smaller organizations like hedge funds and small businesses are “nibbles,” the longtime Bitcoin advocate added.
“I would never use an asset like bitcoin due to the volatility and uncertainty. … It would be like leveraging Amazon back in 1998, 1999 and 2000,” Scaramucci said, referring to the early years since Amazon’s founding in 1994.
Scaramucci advises his own clients to invest in cryptocurrency, but without overdoing it. “I don’t want my customers to miss that. I challenge them to size it appropriately — that’s an allocation of 1% to 3%, 1% to 4% at cost.”
“You can let it run, of course,” he added. “But measure it appropriately and then realize that this will be part of our future.”
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