Anthony Scaramucci, founder and managing partner at SkyBridge Capital, said he believes that the worst of the crypto bear market has already passed, after crypto hedge fund Three Arrows, lender Celsius and broker Voyager went into bankruptcy.
Scaramucci made the comments while bitcoin BTCUSD, -0.53% is still down 66% from its peak in November, trading at around $23,207 on Tuesday, according to CoinDesk data.
“We believe that the leverage has been blown out of the system,” Scaramucci said in an interview with MarketWatch. It’s possible for bitcoin to slide, but “I don’t think it’s going below the low that was reached for this cycle, which would be at around $17,500,” Scaramucci said.
“According to our fair market value metrics based on adoption, wallet size, use cases, growth of wallets, we think the fair market value for bitcoin right now is about $40,000,” Scaramucci said. He added that ether ETHUSD, +0.41%‘s
fair market value stands at around $2,800.
“We on the margin are net buyers, as incremental cash comes into our funds we’re net buyers of those two assets, because we think that they’re fundamentally undervalued and technically oversold,” Scaramucci said. Still, he doesn’t expect bitcoin price to go straight up, considering macroeconomic uncertainties. “Again, these are volatile assets. I guess what’s at issue here is people need to take a four to five year view of these assets,” said Scaramucci.
Meanwhile, withdrawals in Skybridge’s Legion Strategies fund remain halted, according to Scaramucci. The firm made the move to keep the fund’s composition intact after Morgan Stanley put a sell recommendation on the fund, of which about 20% was in private investments, Scaramucci said.
“We have to be fiduciary. All of our clients and I can’t have the private investments go too high,” according to Scaramucci. “I can’t let everybody out right at this second until I can have appropriate fairness and balance in the fund.”
About 18% of the fund was in crypto-related investments, including bitcoin and private investments in companies such as crypto exchange FTX, according to Scaramucci.
The fund is in the process of selling some of its private investments, Scaramucci said. “Once we get liquid on those investments, we will then let whoever wants to get out.”
On the economy, Scaramucci reiterated his views that the hottest inflation in four decades will come down soon. “I think the second half of the year is going to surprise people because there’s already a slowdown in consumption,” he said. “There will likely be a shallow, but not a deep recession because people have a tremendous amount of savings. And there are more jobs available than people looking for them,” Scaramucci said.