OPTO Sessions

Scaramucci and Tapiero: Are Digital Assets the Biggest Opportunity of All Time?

Anthony Scaramucci, Founder and Managing Partner at SkyBridge Capital, and Dan Tapiero, Managing Partner, CEO and Chief Investment Officer of 10T Holdings, join OPTO Sessions to discuss why they believe that bitcoin and digital assets are among the best investment opportunities they have seen in their lifetimes.

This week, OPTO Sessions hosted its first-ever panel discussion with two giants of the bitcoin investing world: Anthony Scaramucci, Founder and Managing Partner at SkyBridge Capital, and Dan Tapiero, Managing Partner, CEO and Chief Investment Officer of 1RoundTable Partners and 10T Holdings.

Scaramucci is also famous for having (briefly) served as Communications Director for former President Donald Trump in 2017, though he now campaigns for the Democrats. SkyBridge is an alternative asset manager that invests in private equity, public equity and digital assets.

Bitcoin Bulls

Tapiero’s 10T Holdings is one of the world’s only private equity funds dedicated to investments in the digital asset space. He is a long-term bitcoin bull and predicted in March that the cryptocurrency’s price could triple within the next two years.

Scaramucci shares this positivity, saying that, “with a hindsight test, bitcoin is the greatest asset that I have seen in my lifetime.

“I’m of the opinion that we’re [looking at] a 10x from here. I’m not going to cap a timeframe on that, because it’s very uncertain. There’s some volatility.”

However, he said, adoption rates for bitcoin are still at approximately 5%. “Just imagine if we can get to 20% or 30%.”

Tapiero believes that the narrative around bitcoin shifted when BlackRock CEO Larry Fink appeared to change his tune on the cryptocurrency. Since then, the situation has changed dramatically.

“For the first time since I had the idea for this fund in the middle of 2019, New York-based financial institutions are interested in talking to me about what we do,” he says.

He argues that this institutional interest has pushed bitcoin as well as ethereum into the category of core assets, rather than speculative or venture assets.

Digital Gold and Digital Oil

What Scaramucci calls the “selling machine of Wall Street” is now revving up to sell bitcoin.

“BlackRock’s got consultants out there telling people they have to own bitcoin. Financial analysts are out there telling their clients they have to own bitcoin. Fidelity is doing the same thing.”

He highlights the state of Wisconsin announcing that it had purchased $160m worth of bitcoin ETFs for its pension fund as a seminal moment. “The state of Wisconsin has said to themselves, ‘Okay, bitcoin is an asset class. I’ve got to get it in my tactical and strategic asset allocation mix.’”

He also highlights the fact that China’s state-owned Industrial and Commercial Bank of China (ICBC) recently published reports praising bitcoin and ethereum, comparing them to “digital gold” and “digital oil” , respectively. In Scaramucci’s opinion, this shows that the bank — the largest in the world — is at least considering the use of digital assets.

No matter how widespread bitcoin asset adoption becomes, however, Tapiero does not see it displacing the dollar over any realistic timeframe.

“There are 125 other currencies that will go to zero before the dollar,” he says, calling it the “supreme currency”. While acknowledging that the dollar has fallen over 99% against bitcoin in the last 10 years, he points out that every other asset has, too. The narrative should centre on bitcoin’s meteoric rise, rather than the weakness of other assets.

Besides Bitcoin

For Tapiero, the proof of the US dollar’s durability amid the rise of digital assets can be seen in the surge of interest in stablecoins. “Four years ago, there were zero stablecoins. And last year I think $10trn of stablecoins were settled. How many things do you know of in the world that go from zero to $10trn in four years?”

Ethereum also has a more diverse range of use cases than bitcoin, and for this reason Tapiero views it as a stepping stone for investors who first become interested in bitcoin to gain interest in digital assets more broadly.

Scaramucci sees value in a similarly broad range of non-bitcoin digital assets, though he sees their value differently.

“I see bitcoin as money. And I see these other things as rail systems where you can control contracts on them and potentially tokenise assets on them,” he says.

Tapiero describes himself as a “bitcoin maximalist that believes in a multi-chain future”, and Scaramucci sympathises with this view, given that “it’s a big world”.

Specifically, Tapiero considers bitcoin to be the “pristine, highest quality AAA collateral” of the digital asset world. This, he feels, is why many bitcoin holders don’t want to sell (or make purchases with) their bitcoin, and feel more comfortable borrowing dollars against its value instead.

The Future of Blockchain

Looking further ahead, he believes that the potential of blockchain technology is far-reaching.

For example, the ledger of permanence that it provides could dramatically simplify the process of buying or selling a home, possibly even to the point of being able to tap phones to exchange a property. The California Department of Motor Vehicles, he points out, is already storing vehicle owner data on the Tezos blockchain.

For those who do want to invest in bitcoin, however, Scaramucci believes that it is surprisingly simple to do — and that now is a good time to do it.

“The simplest way to buy bitcoin, obviously, is through an ETF. You can also do that, eventually, through the ethereum ETF.”

He explains that he himself opened a Coinbase [COIN] account to buy his first bitcoin, but that the ETFs mean that this isn’t a necessary step for investors.

While ease of access is, he implies, pushing demand upwards, supply has also been cut in half by April’s halving event. “Supply is constrained, and demand is going up: that usually spells good things for price activity.”

He also points out that the majority of bitcoin investors — himself and Tapiero included — don’t ever think about selling their bitcoin.

“It would be the last asset that I would sell,” he says, implying that this provides an extra layer of price security.

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