Anthony Scaramucci, founder and managing partner at SkyBridge Capital, is predicting Bitcoin will breach the fabled $100,000 mark within the next two years.
The American financier, who formerly worked as White House communications director, made the prediction in an interview Wednesday with CNBC. He also gave some of his thoughts on Bitcoin’s role amid the Russian economic sanctions, as well as the reason for its recent upward price action.
Are you looking for fast-news, hot-tips and market analysis?
Sign-up for the Invezz newsletter, today.
Scaramucci attributed the recent jump in Bitcoin – which is continuing it’s surge, up 11% this week and now trading at $47,000 – as a bounceback due to “an overselling of Bitcoin and other risk assets as a result of the Ukrainian war”. In such a way, he is perhaps attributing it the overcorrection we saw as markets wobbled at the onset in COVID in March 2020, when Bitcoin swiftly halved to trade below $5K, before the market roared back as whole.
Scarmucci continued that it had been a “snapback and a normalisation of where probably we would think bitcoin can trade to fundamentally, related to Bitcoin’s wallet growth”. It certainly does appear that Bitcoin was hit too hard by Ukrainian tensions – if anything, the crypto should be one of the most resistant assets to global turmoil, if the hedge/store of value argument is to hold. Of course, that’s a big if.
He also cited the power of decentralisation and the resistance of the network in an increasingly turmoil world:
Given the way its scaling globally and it’s very hard to get rid of….remember over 10% of Bitcoin’s transactions are done in China despite the insistence of the Chinese government to remove Bitcoin, Bitcoin miners, (and) banning Bitcoin.
Scaramucci’s point is an important one; it needs to be considered whenever new headlines surface that another country has “banned” Bitcoin. He continued that “the nature of its decentralisation makes it easier to use around the world”, which is really hits the core of what makes Bitcoin so useful.
Perhaps cryptocurrency’s most formidable attribute is this absence of a central authority; the invective laden self-sustaining blockchain which offers this property of decentralisation. And no cryptocurrency exemplifies this better than Bitcoin and its Proof-of-Work validation mechanism.
One interesting wrinkle of the global turmoil recently has been cryptocurrency’s role in the ongoing economic war against Russia. With sanctions being levelled by the West in the hopes of kneecapping Russia’s economy, many have pointed towards crypto as potentially offering a way to circumvent such sanctions.
I’m asking all major crypto exchanges to block addresses of Russian users.
It’s crucial to freeze not only the addresses linked to Russian and Belarusian politicians, but also to sabotage ordinary users.
— Mykhailo Fedorov (@FedorovMykhailo) February 27, 2022
Ukrainian Vice President Mykhailo Fedorov last month pleaded with crypto exchanges to use their centralised power to freeze Russian-linked accounts
Interestingly, Scaramucci argued that “these wallets are pretty transparent…it has become harder to use it to avoid sanctions”. With $630 billion of Russian foreign assets frozen, it is certainly hard to believe that money on that scale could be washed through the blockchain without friction. However, he did caveat that he “can understand why regulators and centralised governments don’t like Bitcoin; you certainly can’t have a Federal Reserve for Bitcoin”.
Finally, Scaramucci closed off with a salivating prediction: the world’s biggest cryptocurrency will trade at $100,000 within two years. He has made such bullish predictions in the past, of course, noting in the interview that he “got it wrong last year because (he) didn’t anticipate the war or the elongation of COVID”.
Referencing the staggering growth in wallets on the network – when SkyBridge Capital first invested there in Oct/Nov 2020 there were 85 million wallets on the blockchain, now there are 245 million – Scaramucci stated that the network effect of this growth is simply too great:
As wallets grow, as transactions on the Bitcoin network grow, I think people get more and more confidence in Bitcoin; the ledger of Bitcoin; the accounting of Bitcoin.
His logic for $100,000 is one that is common among crypto bulls: that the halvings are not priced in, and the increased scarcity will cause a squeeze that sends Bitcoin vertical. Currently, he noted, there are 900 bitcoins per day being mined, however this will drop to 450 at the next halving in February, 2024.
He believes that we will see a halving demand-squeeze, primed to push Bitcoin into six figures. “As that supply constrains, we have usually had a pretty big price appreciation”, he said.
Crypto investors will hope he’s right, and that history does indeed repeat itself.
68% of retail CFD accounts lose money