Crypto Investors Should Ride Out Dotcom-Style Crash: Scaramucci

• Anthony Scaramucci said crypto investors should ride out the dot-com style crash in prices.
• “I think it is nonsensical to expect just an asymmetric 45-degree line in any story as new as bitcoin,” he said.
• The hedge fund manager said he expects bitcoin wallets to go up to half a billion by 2024.
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Bitcoin’s recent price crash doesn’t necessarily mean the cryptocurrency is faltering, crypto investor Anthony Scaramucci believes.

The SkyBridge Capital boss compared the recent crash in digital currencies to the tech shakeout during the dot-com era of the late 1990s, when many companies collapsed or fell by the wayside.

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“But quality things lasted,” he said in a CNBC interview Tuesday, noting that eight times, Amazon’s stock has dropped by at least 50% from its price on going public in 1997.

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A $10,000 investment in Amazon at the time of its initial public offering would have generated gains of $22 million today, he added. 

“Ultimately, it’s about buying quality and recognizing that bitcoin —  and I’ve said this on air many times — it’s not a store of value at this moment,” Scaramucci said. “It’s not technically a currency at this moment.”

“What it is, is an early-adoption technology, an early-adoption technical story. With that, there’s going to come a lot of

volatility

,” he added.

Bitcoin has fallen from a record high of almost $69,000 in November to about $36,480 at last check Tuesday, according to CoinGecko data. 

The crypto asset this week sank to a six-month low, and it is already down 20.9% in January. It began the year around the $45,650 mark, after trading sideways throughout December. 

Earlier this month, the former White House communications chief said he wasn’t buying the dip in bitcoin and predicted more swings in price for the token.

“Bitcoin is going to have, in my opinion, possibly a billion wallets as we get to 2024 and so, people should ride this stuff out,” Scaramucci told CNBC’s Andrew Ross Sorkin.

“I think it is nonsensical to expect just an asymmetric 45-degree line in any story as new as bitcoin.”

While there is no exact figure on the exact number of active bitcoin wallets in the world, data from Crypto.com pegs it at roughly $144 million.

Bitcoin is seen by many as a hedge against inflation, since its limited supply is supposed to have a natural advantage over the US dollars, whose supply can always be increased.

But it has been showing more correlation with equities lately, with its price falling along with other risk assets as the

Federal Reserve

readies itself to start tightening monetary policy by hiking interest rates.

Scaramucci himself though doesn’t think bitcoin is a good inflation hedge, and has previously called it “too immature.” 

Bitcoin’s sell-off has skeptics ridiculing its potential again, and “Dr. Doom” economist Nouriel Roubini has said this must be a “painful” trade for retail traders who bought into the frenzy in November.

Still, Scaramucci is willing to bet that more people own bitcoin by the end of this year than they did in 2021. 

Read More: The head of financial strategy for a crypto-finance firm breaks down why bitcoin could plunge further to between $18,000 and $20,000 this year before bouncing back — and shares 4 high-quality altcoins to scoop up when the market bottoms out