Anthony Scaramucci is a financier, lawyer, and author. A former Harvard Law School graduate, he began working as an investment banker with Goldman and Sachs, started his own finance company Oscar Capital Management, and had brief stints as the Chief Strategy Officer at the U.S. Export-Import Bank and the Trump Administration’s White House Communications Director. Currently, he is the founder and managing partner of Skybridge Capital and the SALT Conference. SkyBridge is a multi-asset class alternative investment firm located in Anthony’s home state of New York with $10 Billion in assets under management. SkyBridge’s Bitcoin Fund LP has propelled into the crypto space with UNLOX, a fund targeting blockchain availability to institutions, and the SkyBridge Bitcoin ETF, which recently failed to be approved by the SEC.
This interview has been edited for clarity.
Harvard Political Review: The US is in the race for a new wave of American democratic influence. The global institutionalization of cryptocurrency is setting the precedent for progressive fiscal, monetary and social policy. Let’s analyze the digital dollar and the politics of Bitcoin today.
Before we get into policy, I want to start off by talking about Skybridge Capital. Earlier this year, Skybridge announced its Bitcoin fund and more recently raising money for a crypto ETF. Why did Skybridge pivot into the space?
AS: I wrote a book recently about it. It’s called The Sweet Life with Bitcoin: How I Stopped Worrying about Cryptocurrency and You Should Too! — it’s a little bit of a spoof.
My odyssey to Bitcoin starts in the government prior to my time at the communications directorship. I spent about a month in the U.S. Export-Import Bank as the chief strategy officer. There I learned about the government’s plans for digitizing the dollar.
I believe that the United States will eventually have a digital dollar. They [the US government] don’t want the Renminbi to be the only one that’s digitized. We have dollar supremacy; we have the reserve currency for the world. But it’s going to become more competitive, and I think there’s a need for that digitization. So when I left the White House after I got fired, I went out and bought the URL skybridgeBitcoin.com.
HPR: You mentioned that it’s inevitable that cryptocurrency will become institutionalized in the US. Do you think that we’ll be having a current crypto, such as Bitcoin, that we see as a legal tender or as the fed-backed dollar?
AS: Well, that is the question that I think none of us have the answer to. There are guys out there like Saifedean Ammous, writer of the Bitcoin standard, that believe that it [Bitcoin] will become the global currency. We will just have so much corruption and so much overproduction that it will spoil fiat currency, shifting towards a Bitcoin standard.
I think what’s more likely to happen is that it becomes a store of value — akin to gold. Currently gold with about a $10 trillion market cap and Bitcoin with approximately a $900 million market cap, you’ve got a ten to one move if you can just get to be gold. My friend Michael Saylor, believes that Bitcoin is, in many ways, more valuable than gold. Gold has some value, but only 5% of its overall market capitalization is represented in its manufacturing value, the other 95% is represented in what we all perceive it to be, which is a store of value. What’s happening with Bitcoin is that network, that expansion of that network makes that valuable in itself. That’s sort of what Robert Metcalf says in Metcalfe’s law.
HPR: In terms of social benefits, we had El Salvador initialize Bitcoin early this year, along with the promise to build equity and access to previously unbanked people. But recently, we’ve seen that small businesses accept it and take on financial risks themselves. What do you think are some of the socio-economic trade offs that mass adoption of crypto can ensue?
AS: A bold move by El Salvador. If you’ve got 180 million Bitcoin wallets in a population of less. seven and a half billion, you’ve only got two-ish percent saturation. So I would make the case that right now Bitcoin is a technological asset that’s in its early adoption phase. And so any of these assets, whether it was Amazon, Facebook, etc. have very heavy volatility. There’s a lot of fear and uncertainty at the early stages.
I think other nations are going to pick it up, they’ll probably wait for it to become more saturated. But in the case of El Salvador, their currency failed — it went to a dollarized economy. But those futures come with a lot of volatility, along with the technical properties related to Bitcoin that we’re not fully set up for yet. We’re talking about Bitcoin, ATMs, etc.
HPR: Pivoting to talking about environmental issues, this has also made Bitcoin or the digital dollar a very partisan issue. Should the environmental impact of Bitcoin and other cryptos concern us, and how can we put in place greener mining regulations?
AS: The short answer is yes. They should certainly concern us. We have to look through a first, second, third derivative analysis. I think the politicians right now don’t really understand Bitcoin, somebody like Senator Elizabeth Warren, a former Harvard Law School professor, who’s supposed to be a progressive champion and a champion of the underbanked, is railing against Bitcoin. She really doesn’t understand it. She has a superficial view of it. I think that’s unfortunate.
It takes time to learn about Bitcoin, at least it comes with an informed view. I can list a lot of luminaries in the investment space that was originally reluctant and skeptical of Bitcoin that became Bitcoin investors [Paul Tudor Jones, Ray Dalio, Bill Miller]. I would like people like Elizabeth Warren to learn more about it. I think she would recognize that it probably solves a lot of the problems she’s looking to solve over time — this could be a great vehicle for the underbanked. This could be a great vehicle for the poor people in the country not to get burdened with all those minimum charges that we see from the money center and regional banks.
Bitcoin represents 0.13% of all carbon consumption. We’ve learned from the Bitcoin mining council that about 56% of the mining is done with renewables. The goal for the community is to get that to be 100%. Bitcoin, long term in my mind, is a carbon admission or carbon-emitting eliminator over time. I don’t think it’s part of the problem. I actually think it can be part of the solution.
HPR: One of the concerns is the velocity of cryptocurrency has become astronomical recently. Earlier last year, President Biden established the American Families Plan to tax crypto and other transactions. What do you think the government’s role is in regulating crypto and other digital assets?
AS: So Gary Gensler, who’s probably going to lead the charge for the government, is an experienced person — a former MIT professor and Goldman Sachs partner who was the chairman of the CFTC is now chairman of the SEC. He’s in a tough spot politically, because he has a lot of politicians around him who don’t really understand it. So I think you’re gonna see harder regulation from him than I would have expected because he has to prove his chops.
Brian Armstrong has the best read. Why cede our technological prowess and our ability as a nation to lead the world in global finance? If the government goes too tough on the regulation, the exchanges will stay offshore, and there’ll be a brain drain off the shore of the United States. That would be a real, real shame. I’m expecting harder than I would have thought about regulation, but I’m still optimistic that the United States will intersect at a point where they will want the commercial activity that comes with the blockchain and cryptocurrencies.
