I would say if 100 people do 100 hours with the research, 90 to 95 of those people will end up buying Bitcoin. We made a strategic decision to go in big. This monumental decision that you're talking about. So these in my neighborhood are Italian singles and I'm always carrying a lot of them, but I think you could say it's probably the best performing asset in the last 15 years since its inception. It went from a penny, but in volatile fashion.
Hi there, I'm Liz Thomas, head of investment strategy at SoFi and this is the important part. There's been a ton of volatility in crypto lately if you've been watching. Bitcoin is down about 40% from its highs and sentiment has shifted quite a bit. If you're an investor, you're probably asking yourself is this just another dip or is something breaking? If you're Anthony Scaramucci, you are saying this isn't the kind of drawdown that's a warning sign. It's the price of admission. So we're going to talk about that today. Anthony is founder and managing partner at SkyBridge Capital, a global investment management firm focusing on alternative investments including crypto. He's also one of Wall Street's most vocal advocates for Bitcoin and digital assets. So happy to have you here.
Flattering introduction. Thank you.
Good. We like to start everybody out on the right foot. Good. Also, I have to say to everybody listening, nothing in this episode should be treated as a recommendation from SoFi and is not investment advice. And make sure that's out there. Okay, so let's get the big stuff out of the way first. Bitcoin's down. The last I checked it was early this morning, it was somewhere in the 70,000 range. So that means down 43% from its highs in October, which is better than it was at some point earlier this year. Bitcoin's down 43% from its highs as of today. You're still bullish. I don't think that's a secret, right? So we're going to talk about why. First tell me though what started this dip and what kind of put fuel behind it?
Well, I mean I think I want to go to what started the rise to 126 if that's okay because it sort of peaked at 126, down 43 now, but it actually got down almost 50%. It was at its low for at least this cycle. It was down about 49%. There's this regulatory component. So now the expectation are that two different pieces of legislation are going to pass. One is the Genius Act and around stablecoins and one is the Clarity Act, which is around market structure. And so the thought was in 2025 we'd get both of those pieces of legislation passed and so Bitcoin zoomed up to 126,000. In October that was the peak.
But you know, as everything happens in our businesses, I'm this is my 38th year of investing and I've been through 10 bear markets. People at the top get over leveraged, they get very ebullient, they get very talky optimistically at the top. Chatty at the top. And so what ended up happening was the legislation seemed less likely to happen.
And then you may remember on October 10th the president was talking about rare earth minerals in China. It could have been anything for that matter, but it sort of pulled the pin on the situation and then we had a cascading effect where Bitcoin specifically, other coins did as well, but Bitcoin specifically traded down. So it's important to lay out that backdrop. And so if you're sitting there as a Bitcoiner, I think another thing that happened the ETFs came into place. BlackRock now has probably one of the largest ETFs in the world, their Bitcoin ETF known as IBIT. You saw a lot of buying into that ETF. It was from I don't know whether it were the individuals, some institutions, some pension funds, etc. And then concomitant to that you saw whale selling. And so you literally had people that were holding Bitcoin from 10, 12 dollars, 100 dollars. They made a decision that north of 100,000 that seemed like a good time to sell. Maybe they had that in their heads from years ago. If it gets to 100, I'm going to take some money off the table. But all that notwithstanding, I think we're in the typical four-year cycle for Bitcoin. And so what typically happens is just to give people a quick refresher, Bitcoin launches in 2009. If you read the Nakamoto white paper, you're basically going to have supply put into the marketplace. It's going to be fairly consistent supply and then every four or so years as it gets to a certain hashing moment, you'll have a halving of the supply. And so the supply halving happens every so four years or so. About two years ago we went into a halving, Bitcoin halving where we went from 900 coins per day to about 450 coins. And so what that does is it shrinks up the supply and it changes the dynamics for the miners, the people that are mining Bitcoin. And so what you've had over the last three, four cycles, these four-year cycles, you've had a period of rising in the beginning of the cycle and then you have anywhere from a 30 to 50% correction as you get to the middle of the cycle, which is more or less where we are. And then if I'm right about this, the cycle will start to regain traction towards the beginning of the fourth quarter of this year. So you'll start to see probably movement and activity, appreciation by October of this year. And so that's very consistent with how a traditional Bitcoiner would think about it.
I saw you on a flight. We were on the same flight to Miami, I think.
Mhm. And it had we had just gotten through that crypto winter.
Right. And I remember iConnections conference. I think it was here. We said hello and I said how are you doing? You said I made it. I made it through this one.
Yes, somehow you know, but I made it with my hair intact. I was actually very happy about it. I thought most of my buddies were losing their hair during this period of time, but I haven't sold any, you know, and I've been buying it regularly. And I think what you have to do with Bitcoin, and I say this to people, you have to study Bitcoin and you have to do the research on Bitcoin. And people that do say the requisite 100 hours of research, I would say if 100 people do 100 hours with the research, 90 to 95 of those people will end up buying Bitcoin. I'm not saying everybody, but I believe that people who really understand it look at it and say, 'Okay, that is a hardened asset. It has the technical properties that we've always looked for in money.' Got to think about it for what it actually really is. And this is this hardened global fully transparent, fully distributed, decentralized spreadsheet. And so the tokens are the pieces of property, the digital property on the spreadsheet. They're immutable. They can't really be changed. There's 21 million of them. There'll never be any more of them. Some think maybe one or two million of them were destroyed just from the lack of storing them properly in the beginning of Bitcoin. So you have a very small supply. And I think you're going to have lots of global demand over time. Will it be the universal exchange? Will it reach what Michael Saylor talks about, the Bitcoin standard where it will be our global monetary system? I'm not in that camp. God bless him for being in that camp. I see it more as a digital store of value. I see it more as digital gold. And people my age don't believe that because when you had the currency debasement fears going on in 2025, gold shot up. You had a K going on. Gold was going up and Bitcoin was going down, which tells you that the people above the age of 60 that have the money, Liz, they are still thinking about gold in the old-fashioned traditional way that we think about gold. But I would submit to you that people that are my children's ages in the low 30s will 10 years from now be in their low 40s. And as they get into senior positions in asset management firms, they'll see Bitcoin differently than their moms or dads did and they'll see Bitcoin as a digital store of value, easier to move around than gold, a lot more transferability, but sort of the same properties and sort of the scarcity of it. And I think it reaches the market capitalization of gold. Now gold is at a quite a run, but it's also had quite a setback recently.
Yeah. And I think we lost 15. Is now a good time to tell you that I was one of those people buying gold, but I'm not 60 or over. I at the time was in my late 30s, early 40s talking about gold and it went well for me for a while.
Yeah. Gold outperformed the S&P over for three years. So it went well for a while, but I think and I want to talk about this, but back to this particular drawdown. A couple other theses that I heard about it. It was accelerated by a huge leverage unwind.
Mhm. That's one. And the other thesis, much like the one that you're talking about, these four-year cycles that Bitcoin tends to go through, that it was actually a little early for that to be happening, but people knew that might be coming. So in anticipation of said four-year cycle, they just started to sell. Okay, so that's two. Let's those are the two that I heard most often because I think those started to come up because people were having a hard time explaining it because the correlations broke down, right? We wanted to be able to say, 'Okay, this is just risk off. It's completely correlated with the Nasdaq.' And that wasn't really holding exactly as we thought it would. Or it's completely inversely correlated to gold. Or it's inversely correlated to the dollar. And then the dollar was going down and Bitcoin was going down. So, I think people ran out of ways to explain the drawdown. Yeah. And then the thesis was, 'Okay, it must be some kind of leverage unwind. Or it must just be that sentiment is shifting ahead of this four-year cycle.'
More. Okay. Okay, this is the one where I was talking about. The third one was whale selling. Yeah. So, you had monumental volume hit the Bitcoin marketplace in 2025. Now, a lot of that volume, frankly, was absorbed by the ETFs. So, ETFs generally have had lots of net inflows over the last roughly 2 years. But, I would say to you that you had those two things that you mentioned, plus some whale selling. Yeah. And then you had uncertainty around the regulatory environment. And you know, people go on the air, they come on your podcast, or we may see people on CNBC describing it in different ways, an inflation hedge, store value, etc. I never describe it like that. Okay. I say this is an early technology still. It's 15 years old. It's been very hard for people to understand, and it's had the headwind of a lack of regulation or regulatory guidance to allow for its full acceptability. And so that headwind has prevented Bitcoin from really going in the direction that it could go in. Having said all of that, it's probably been one of the best performing assets in the last I mean, I think you could make the statement I'd have to Google it or chat GPT it, but I think you could say it's probably the best performing asset in the last 15 years since its inception. It went from a penny, but in volatile fashion. Very volatile. But, most technology is. Most technology starts out volatile.
Well, and but I think that's important, the way you're framing it. Frame it as a technology, not as an asset in the portfolio that's going to hedge against something all the time. Not yet. I think it could be those things.
Okay, so what is yet those things. What it is is it's loosely correlated to the Nasdaq. It used to be directly correlated to the Nasdaq. It's more loosely correlated to the Nasdaq. As we continue to scale, okay, I think it will fit the parameters that you see in gold. And I just remind people that gold seemed like a very stable asset until recently. Now, gold itself has had a lot of volatility. You look at gold trading patterns in the last 12 months, there's been way more volatility in gold than in years prior. And so, we have to accept that there's going to be volatility, but I do think over time this will become an adopted asset class. And I would just recommend to people to learn about Bitcoin. I am always cautious with people. You don't have to make a big investment. But, if somebody like me is right, a 1 or 2% position in Bitcoin, let's say I'm wrong. And I've been humbled by life. I've been humbled by markets. And I certainly could be wrong. If it trades to zero, you haven't impaired your capital base substantially if you only have a 1 to 2% position. But, if I'm right, and it's a $1.5 trillion asset, and I don't know where gold is right at this moment. I'm assuming it's about 30 trillion for the sake of this argument.
I did the math this morning. About 30.9, I think.
Okay, so if you have a $1.4 trillion asset that could potentially reach parity with gold over a 10-year period of time, and you put 1 or 2% exposure in it, and people like me are right, or Michael Saylor, or Michael Novogratz is right, I think you'll be well served. Cathie Wood, you know,
Long. So, we're talking about Bitcoin I just want to make sure everybody heard that clearly. So, Bitcoin right now is somewhere between 1.4 and 1.5 trillion dollar market cap. Right. That's with the 19 million coins outstanding.
Million outstanding. And there could be up to 21.
Right. So, does that include it going up to 21?
Yeah. I'm saying the overall market cap, 21 million coins into the marketplace, I think could trade close to $30 trillion. That would be roughly Over how long? I would say it probably take 10 to 15 years. Okay. But, the question is is that a good investment for you to go 20x on something in 10 to 15 years? For somebody like me, it is. And so, I own a lot of Bitcoin. And I've recommended it to people. And I made a decision and it cost me, by the way, I made a decision to pivot a part of our portfolio into Bitcoin way back in October of 2020. And so, I think we've been generally right directionally. And I think we'll continue to be right. But, we got to get the regulation right.
One of the themes of this season of the podcast is high-stakes decisions. So, I want to talk about when you made the pivot. So, you've been a traditional finance guy for decades. Yep. And decided to make the pivot. You've already referenced this a little bit. SkyBridge went into crypto, but not entirely, right? It was About 30% of the assets.
30%. But, that's a big chunk.
Big number. Yep. So, and you what you committed to it. Yep. And committed, I imagine, like personal life mentality to it, everything. What convinced you at that point that, 'You know what? I need to put a third-ish of my company behind this?'
Well, I got it wrong. So, let's talk about where I got it wrong. I was introduced to Hal Finney, who was the first recipient, a computer programmer, back in 2011. I was at a presentation. He was at the Ames Research Center. He was making a presentation on Bitcoin. I did not understand it. And I think I put out a tweet, 'Bitcoin is ridiculous. Don't understand it. Caveat emptor.' There's a tweet for everything. And then I got introduced to it again. I was at our SALT conference in Las Vegas. And the Winklevosses came, and they were describing Bitcoin to me backstage in the green room, and my eyes were glazing over, and I was like, 'Okay, I don't understand it. I'm not going to invest in it.' And so, I infamously was in the White House for
