The Wolf Of All Streets - Bitcoin To $400,000 and 1 Billion Users | Anthony Scaramucci

Episode Date: July 27, 2021

Anthony Scaramucci and his company Skybridge Capital have been dominant names in the crypto media, as they have been leading the charge for institutional adoption of Bitcoin. They have their own ETF proposal and proprietary crypto funds, so it’s safe to say the “Mooch” has a bullish long-term outlook for the crypto market. It is Scaramucci’s belief that both Bitcoin and Ethereum have proven themselves as the gold standards of crypto, both earning his approval and allocation. You’ll have to listen all the way through for some epic Scaramucci predictions. Anthony Scaramucci: https://twitter.com/Scaramucci --- Matcha: Matcha is the easiest way to trade in DeFi. Matcha enables you to trade across all the major DEXs so you can be sure you’re getting better prices than going to a centralized exchange or Uniswap.   Connect your wallet and start today at https://thewolfofallstreets.link/matcha --- If you enjoyed this conversation, share it with your colleagues & friends, rate, review, and subscribe. This podcast is presented by Blockworks. For exclusive content and events that provide insights into the crypto and blockchain space, visit them at: https://www.blockworks.co ーーー Join the Wolf Den newsletter: ►►https://www.getrevue.co/profile/TheWolfDen/members

This episode is brought to you by Matcha. Stay tuned for more information about them later in the episode. What's up, everybody? I'm Scott Melker, and this is the Wolf of Wall Street's podcast, where twice a week, I talk to your favorite personalities from the worlds of Bitcoin, finance, trading, art, music, sports, and politics. Basically, anyone with a good story to tell. Now, 2021 has been an exciting year in the crypto space, but many major financial institutions have remained

hesitant when it comes to Bitcoin. This clearly is not the case with SkyBridge Capital. Anthony Scaramucci has been bearing the institutional flag for the Bitcoin community and just this year has launched the SkyBridge Bitcoin Fund for institutional grade investing. It's my hope today to learn more about Anthony's views on Bitcoin and the entire crypto ecosystem, what he's seen with regard to adoption by other institutions, and how he views the recent dip, and most importantly, how he can earn a name as cool as the Mooch. Anthony Scaramucci, thanks so much for coming on. It's great to be here, and congratulations on everything you're doing. And of course, I follow you on social media, and I'm a huge fan. And I love what you said in the introduction, you know,

not a lot of institutions in the space yet, Scott, you know, I mean, I, I think that the institutional adoption story, frankly, has been overhyped. We are in the space, we have probably a half a billion dollars in Bitcoin, we just launched an Ethereum fund on July 1st. We've got about $25 million in that fund. And so we're hoping to scale that as well. We have a digital architecture fund, which is tied to crypto. So we call it the SkyBridge First Trust Digital Innovation Fund. So these are like PayPal and Square and companies like MicroStrategy, but then also companies like Overstock that have large VC components to them. And it's just a way to get our clients immediately invested in a sleeve of stocks that are tied to the digital

asset universe. But I think you're right. I mean, it is slow going. There's 125 million Bitcoin accounts out there, as far as we can tell. We think it'll scale to a billion in the next four years, but we are very, very early. People ask me how early. I say, we haven't even broke spring training yet. Forget about what inning we're in. We haven't even headed north out of spring training. So very, very early. Psychologically, some can't get their arms around that because they had the chance to buy Bitcoin at $500 a coin, a dollar a coin, $1,000 a coin. But what has happened, which I'm impressed by, is the storage capabilities and the ease of being able to purchase Bitcoin. I can go to Coinbase. I can go

to Binance. I can go to BlockFi. I've got places where I can put my Bitcoin, buy my Bitcoin and know that it's safe, that I don't have to worry about my keys being stolen. So that's all positive. I love the spring training analogy. We usually get the first pitch of the first inning analogy. So it's even earlier, I would have given the Donald Trump awkwardly throwing out the first pitch analogy, perhaps. Such an athlete. But so it's interesting, though, because a lot of the narrative about this run from 10,000 to 65,000, depending on where you peg the beginning of it, was this institutional adoption largely driven by funds like you pegged the beginning of it, was this institutional adoption largely driven by funds like yours, but also, of course, the micro strategies and Teslas of the

world starting to talk about it. And I think there was a lot of hype that it was going to happen. And then the announcements just sort of never came. Right? Yeah, well, listen, I mean, but it should also tell you something about the tightness of the market. And so what I mean by market tightness, micro strategy, stories related to Elon Musk, all of a sudden, boom, you're creating great Bitcoin appreciation. A little bit of bad news, there's leverage in the system, boom, you're creating a deceleration. That boom and bust cycle is usually associated with the early adoption of things. I can take you to a chart of Amazon, Facebook, Google, anything that's scaling pursuant to Metcalfe's law and the networking effects that people are benefiting from now in the age of the internet has this boom bust feature to it.

But what I'm impressed with with Bitcoin is that remarkably Bitcoin is anti-fragile. Because if you sit down and you go from an $8,000 coin a year ago to a 30 plus thousand dollar coin today, and let's say we didn't have the 65,000 blow off top. If I said to you, well, it's July of 2020, Scott. And I'm going to tell you right now, sometime in July, right after the 4th of July holiday, Bitcoin is going to be worth $33,000 a coin. You would have been euphoric. The Bitcoin community would have been euphoric. It's the psychology of going through that and seeing a $64,000 print that is unsettling to people. But I see that as a positive. I see that

as a supply demand shortage. I see that as sensitivity to the fact that it's a tight market. If BlackRock hypothetically came in and said, okay, we're going to buy 100, I don't know, million, 500 million, you pick the number. Let's say they brought $2 billion worth of Bitcoin. It would seismically, sizably move the markets. And so you've got tight supply. And I think you have constant news stories, Scott, that are positive about Bitcoin, positive about the ecosystem, positive about adoption. You know, El Salvador, it's only 7 million people. I get it.

But it is a country that is accepting Bitcoin now as a legal tender. Facebook is now thinking about ending Libra using Bitcoin, Square, Bitcoin, PayPal, Bitcoin. You can build this case that, you know, there's more good news about Bitcoin in the last 12 months than at any time in the history of Bitcoin in terms of where Bitcoin is going. I was discussing this with someone literally this morning. I said that we get a news story five times a day. It used to be five times a year before last year that you would see a Bitcoin story in the mainstream. But they're in general positive. They're in general positive. Even the latest thing from the Bitcoin Mining Council, where 56% of the miners are now using renewable energy. And so the whole species argument that Bitcoin isn't green

is it's a species argument. It's an argument thrown out there by people that should have bought those coins at 500. They're now pissed that they're at 33,000. So they're throwing eggs and tomatoes at Bitcoin primarily because they missed that movement. But my message to those people is that we're just getting started. Anything below $40,000 to me is a screaming buy in Bitcoin. I mean, these coins are on sale right now. A year from now, I just said to you, it's July 2020, and I'm predicting July 2021. Well, let me get invited back. Hopefully you'll invite me back one year from now. And these coins will likely be close to $100,000 a coin. And you'll be like, okay, why did I miss that two, three to one bump? Well, I missed it because people were telling me

that I would be the stupid one. I'd be the last person into the story. Excuse me. If you remember, that was Amazon. Amazon has gone from a $10,000 investment on its IPO to $21,140,000 today. I want you to think of the magnitude of that. If you would just the strength to buy Amazon in 97, $10,000, now worth $21 million today. But you would have had to subject yourself to eight 50% downdrafts in Amazon. And there was one really bad one after the 2008 financial crisis, it was down 70%. And the front page of Barron's, the weekly financial news magazine, the front page was Amazon.bomb and why the end is coming for Amazon. And yet, if you just held out, you got the direct benefits of all of what Robert Metcalf

talked about when he discussed Metcalf's law and the scalability of a network. And Bitcoin is that. In fact, Bitcoin is growing faster than Amazon, Facebook, Google. It's adopting, it's pacing the internet in terms of its adoption. If you think about the internet's move from 1995, the introduction of Netscape, to 2007, that 12-year move, Bitcoin is moving faster and there's more adoption of Bitcoin than there was the internet. Yeah. The Amazon story is incredible. Mark Yusko shared almost the same idea with me, basically that it's about impatience, obviously, and weak hands.

And he made the claim, which I have not checked on, that only four people still hold stock from the Amazon IPO, being Bezos' wife and two other people, because everybody else was shaken out at some point during that process. successful person in our law school by a factor of everybody, meaning you could have taken all of our net worths and added them up and it still wouldn't have matched hers, was the late and incredibly great person, Joy Covey, who was the first CFO at Amazon. And she made herself, I think, three quarters of a billion dollars being the person that helped Jeff take the company public. And I can remember her talking about this 10 years ago, that normal people sell things that go from $1 to 100. Normal people sell things that go from 100 to 1,000. You know what I mean? And so I don't know if Mark is 100% right about that or not, but I believe he is based on what I know about human nature and human psychology. Well, I think most early Bitcoin adopters probably sold at $1,000.

No question. I have a lot of friends of mine that got shaken out at lower prices, but I didn't come in until higher prices. You know, I will say this to Bitcoiners everywhere. Nobody feels that they're early. Nobody, unless your name is Satoshi Nakamoto. I got in at 10,000 a coin. I've been buying through my last printed coin was 63,200. I, of course, had bought coins since that print. So I've been buying coins every month. So I've gotten some recent prints in the 33s, 37s, but I haven't gotten the low print either. I'm buying regularly weighted average dollar cost averaging into the coins. a person that owns a Bitcoin that thinks they got there early. They all shake their heads and said, well, I could have bought it at 10, 50, 100. But remember something, somebody like me is not buying it back then. Hard to store, would have had to put it on a USB or my laptop. There wasn't Coinbase Pro or Fidelity digital assets. I couldn't feel comfortable scaling into Bitcoin. And again,

our company has about $500 million worth of Bitcoin, half a billion dollars of Bitcoin right now. I couldn't have felt comfortable scaling into that level of coin if there wasn't a safe place to store it that I didn't feel was impenetrable from hacking, or even if it got hacked, it had a layer of insurance, and so forth. So the world is changing. And with that, the adoption story will change, and it'll make it better. I loved how you expressed the 8,000 to 33,000 in one year idea, if you eliminate the 65,000 to 33,000 mentality of it. What I think is the story that nobody tells is that Bitcoin dropped from 65,000 to 29,000 and the network's up and running. China banned miners. The network's up and running. It's fine. Everything's working. No bailout, no centralized

authority had to come in and start buying things. It's a free market that's working perfectly as intended without any assistance. And I think that is one of the most fascinating stories of our time. And I said earlier that it's anti-fragile. You just made the case for anti-fragility because everything you just said is symbolic of anti-fragility. It got hit. It got slammed. It's intact.

Given all of the bad news, frankly, you would have said, OK, why aren't those coins down 80% or 90%? But they're not. And they seem to have a bid. They seem to be stuck in the trading range for right now. That's OK. But imagine a trillion dollars taken out of the banking system, the US banking system. Imagine the uproar. Imagine the congressional intervention. Imagine the Federal Reserve coming to the rescue of these banks. Yet you have this decentralized network where all those things happened and the system is running. It tells you about how decentralized networks are way more stable than centralized networks. And it just, it tells you that we've empowered ourselves now with

technology. This device that I'm sitting here with is a radio station. It is a television studio. It is a motion picture studio right here in this device. And all of a sudden, as a result of that, I can build my own YouTube ecosystem. I can build my own pay application. Look at my friend, Anthony Pompliano, what he's done with his social media, his YouTube channels, his newsletters. it's all because we have empowered the individual with technology. And so wouldn't it make sense that we would then further empower individuals by making our money better, by making our store of value technologically in sync with the times? And the answer to that is, of course, we would do that. And so we are doing that. And if you're 97, you may be missing it. Maybe you're not spending

enough time focused on it. But I'll tell you what, if you're 27, you're not missing it. You're right on it. Speaking of 97, Buffett and Munger and their generation seem to be somewhat unhappy with Bitcoin and obviously Rat Poison Squared and all the narratives that they've been perpetuating. What do you make of that generation's disdain for the asset? Do you think that it's too old to understand it or purposely dismissing it or that they see it as a threat or none of the above? Well, probably a little bit of the above, right? It's probably a little bit of everything. But I think the thing that I find weird about it is I'm a disciple of Buffett and Munger's. I view myself as an intellectual disciple of theirs. I don't know

them. I met Warren Buffett a few times. I think I have a picture of myself with him. But I have no relationship with him. But what I would say about Mr. Buffett is he is a unbelievable. And one of the core philosophical tenets of him and Munger's argument is that they need to know the other side of the case better than their own case. So if they want to be long American Express, they want to know the bear story behind it. And what Munger has said repeatedly is I want to know the opposing argument better than my own. Yet when I hear him talk about Bitcoin, I can tell he has not done the work. I'll give you an example. Ray Dalio, who was a young pup at the age of 71 compared to somebody that's 97, who was negative on Bitcoin. He did the work.

He did the homework. He steeped himself in the system and he came out on the other side owning it and suggesting that it's better than bonds. Paul Tudor Jones has done that. Stan Druckenmiller has done that. Bill Miller, the legendary value investor originally from Lake Mason, the Lake Mason Value Trust has done that. So I think Warren Buffett and Charlie Munger, for whatever reason, are jumping the shark here. It could be old age. It could be lack of intellectual curiosity. It could be frustration that something is happening that they don't get. Or it could be what Buffett and a guy named Jeff Bezos at the Sun Valley Allen & Company Conference in the year 2000, where Mr. Buffett said, yeah, Mr. Bezos seems like he's got an interesting thing. It's a

bookstore plus some other things. I'll never invest in it. Okay, well, why won't you invest in it? Well, it's technology. I don't understand it. I'm going to stay in my core, my circumference of competency. When Amazon rose, he applauded it, but he never invested in it. He did invest eventually in Apple and IBM because he looked at those from a numerical perspective in terms of what their growth rates were. And so Buffett and Munger are not Metcalfe Law network effect investors, a result of which they've missed trillions of dollars of value, but doesn't make them any less successful as investors. It just makes them human. It makes them fallible human beings, which we all, of course, are. Guys, I really hope that all of you are not still trading on the old platforms like Uniswap when there are much better options like Matcha. And now Matcha has upgraded to 2.0. Now I've told you about Matcha a number of times. They have

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you, it will save you so much money and is such a superior experience. Do it now. I would love to hear more about Bezos being the greatest capital allocator, as you spoke about. So Bezos, in response to Buffett in 2000, he wrote down his manifesto. And I would encourage everybody to read it. Or you can buy the book, Invest and Wander. It's the writings of Jeff Bezos, where you can read his last letter before he departed as CEO of Amazon. And basically what Bezos says 20 short years ago is the money coming into Amazon is going to be focused on scalability. And the money coming into Amazon is going to be focused on building the network. So he got what Metcalf was saying about the network effect very, very early on. And he made all of those investments propitiously related to that. And result of which it's been staggeringly successful.

Mackenzie Bezos combined with Jeff Bezos, it's two hundred and fifty billion dollars. It's a250 billion. It's a quarter of a trillion dollars between those two people, and they own a fraction of Amazon shares. And so when you think about allocation of capital, it was disciplined. It was aggressive. He's had failure upon failure. What are those failures upon failure uh what are those failures upon failure uh they would be uh fire phone the first starting of the kindle i could name i could name hundreds of them uh he his portrait

was unveiled in the national portrait gallery in washington two years ago and he started reading off his failures and everyone was giggling Here he is the richest person in the world. And so, so but the capital allocation point is it was concentrated, it was disciplined, he had a vision, and he stayed on it and pursuant to one of Buffett's principles. Warren Buffett said, keep your eggs in one basket, you know, that cliche, don't put all of your eggs in one basket. Warren Buffett said, keep your eggs in one basket. You know that cliche, don't put all of your eggs in one basket. Warren Buffett said, keep your eggs in one basket and watch the basket. In other words, it was okay to be concentrated if you knew what you were doing. Or Buffett would say, don't trade Michael Jordan for four scrubs and call it diversification. In fact, that might be de-worsification. So Bezos never strayed from

his mission. And of course, Amazon Web Services, when he realized that the services that he needed to grow Amazon, there was nobody better to create those services than himself and his team. That's when you really saw the exponential pickup in Amazon. Just think about all of the great businesses that are powered up by Amazon Web Services today. Yeah. It's such an interesting point, obviously, that diversification is important when you have wealth, but you need concentration to acquire it in the first place, right? At what point should an investor consider diversifying? Well, it depends on what you want to be. If you're shooting the moon, you got to stay concentrated. If you're wealthy, and let's say I put my financial advisor's hat on where I served

as a financial advisor for a good part of my career, I would tell you that there are two key words that I always mention to the wealthy. And you want to hear those two key words? It's my whole philosophy. Ready? Stay wealthy. You're wealthy. So stay wealthy. Okay, don't chase rainbows or unicorns. You don't have to be the first person into Uber, the first person into Facebook. But what you need to do is you have to have a diversified plan that beats inflation, that outpaces your peer group. And so that that requires a lot of equity. It requires some private equity. It requires some early stage company development because of the transformation of our society. The 60-40 portfolio is no longer working.

The bond market has been imperiled by all of the money printing. And so you need to think in a more targeted, diversified, growth-oriented way as an individual investor if you want to grow ahead of your wealth. And that's the only way to stay wealthy. If you decide, OK, I made my money, I'm going to stick it in the ground, or I'm going to give it to the US government in the form of treasuries, you won't be able to compete with your peer group at Sotheby's at the auction, or for Hampton's real estate on the ocean, just won't happen. So it's a philosophy that I think is changing. If you had asked me 25 years ago, I would have said, OK, 60% in stocks, 40% in bonds,

maybe some of those bonds are immunies, blah, blah, blah. That world is over. And by the way, Bitcoiners understand that. Bitcoiners see 31% dollar production in a year. Bitcoiners see $469 billion of money printed by the Federal Reserve in calendar year 2021. Bitcoiners know that if they have dollar-demominated assets, they've been taxed by their central bank. If I'm sitting there, I have $10,000 in my checking account. Well, it's got less purchasing power here in 2021 than it did in 2020. I've been silently taxed by my central bank. Right. Well, if you can't do it with the 60-40 allocation that we've talked about for decades, then where does Bitcoin fit into that percentage for a person who's already accumulated wealth?

Well, if you talk to my partner, Brett Messing, he's irresponsibly long Bitcoin. I'm the trustee on his account, and he's got almost all of his assets in Bitcoin. So he's a true believer in Bitcoin. I'm a believer, but I'm not an evangelist. I don't think Jesus and Moses had a baby and they result of which it'll be several hundred thousand dollars a coin, and I want my clients to be exposed. If you're aggressive, I'm going to say 8%. But I will tell you this, you're foolish at 0%. So to me, it goes from foolish 0% exposure to Bitcoin to aggressive 8% exposure. If you're Brett Messing, you're at 95% exposure to Bitcoin to aggressive 8% exposure. If you're Brett Messing, you're at 95% exposure to some of these other people. And they are true believers. And they're in that Buffett category or that Bezos category where they've decided that

this is where they're going to put their eggs and they're going to watch the basket. And you've got to accept the volatility. Remember, Bezos himself, he's gotten to where he is by recognizing that there's volatility to the network. Eight times Amazon dropped more than 50%. And that'll likely be true with Bitcoin. You could be at a $500,000 coin descending to $300,000. You and I will be on a podcast and people will be saying, poo, poo, Bitcoin went from 500 to 300. And I'll be like, okay, yeah, but I bought it at 30. Okay. And it's now at 300. And it'll likely get to 600 if you're patient. So, so to me, I think it's a complicated thing. But it requires a lot of discipline. And it requires a understanding of the macro dynamics of where the future is, irrespective of the current fears and uncertainties. So you talk about Metcalfe's law and network effects, and clearly you guys are moving into Ethereum. You said you have $25 million in a

new fund. Where do you think that it plays a role in an investor's portfolio? And why are you interested in Ethereum now as well? So I accept a principle that David Rubenstein, of all people, a great establishmentarian, the founder of Carlyle. He's on every national board. And he's a public figure of the establishment. He said a few weeks ago that it's not written on a tablet somewhere that the currencies have to be created by the sovereigns, that ultimately there will be other forms of currency that are accepted. Now, somebody said, well, these are like whiskey

receipts back in the whiskey rebellion. I'm like, well, no, they're not actually, because this whole thing is based on mathematical properties and it's based on a proven mathematical ledger. So there's no way that you could say that. Now, having said that, what I just said, I do believe that there are other currencies or tokens that will be successful. There will be use cases for other currencies and other tokens. So I mean, we can talk about Dogecoin. I don't see the relevancy to that or the long-term applicability. I get the fact that we're in a fever pitch bubble related to Dogecoin and that some very high-profile billionaire celebrities are talking about it.

But I don't see the long-term positivity that that to me feels like pets.com or eToys back in the late 90s. But Ethereum feels like there is a use case. Ethereum feels like there's a these dApps, these applications that you can put on Ethereum and the whole NFT market is based on Ethereum. Now, that's not to say that someone couldn't come in and eclipse Ethereum. I don't know the answer to that. I would suspect that perhaps Ethereum will have competitors that perhaps may have faster protocols or may prove to be more echo friendly. It's very hard to know, frankly. But what I do know about Ethereum at $200 plus billion in market cap is here to stay. And it's part of the future. And those two seem to be the gold standards in

cryptocurrency right now. And I would want my clients exposed to both. Now, that's not to say that six months from now, I won't be on your podcast and say, well, you know what? My research team and I are working on other tokens that we like that we may want to include in that sort of these are the coins of the future. But I'm not there yet on the other coins. But I am there on Bitcoin and Ethereum. I would have to imagine that when you started talking about crypto to your clients, that you had some pushback or at least questions. Have you seen any sort of paradigm shift?

No, not pushback and questions. I'm selling my shares in your fund. I said, you are? Yes, you own Bitcoin. Bitcoin is rat poison. Okay. Sell this shares in the fund. Remember, in my core fund, I have 5% exposure cost. Now, through the good luck of appreciation, it's now at 9%. But that's born from, well, you have 9% exposure to Bitcoin. Yeah, but I started at 5%. My point being is I'm not going to sell Bitcoin just because it's doing well. I'm going to hold Bitcoin until it reaches our near-term to long-term price targets. And people are upset about that. They will sell out the Bitcoin.

And then if I'm right, they're going to look back and say, well, geez, that was a mistake. Why did I do that? My point is that 5% exposure, I'm in a situation, Scott, where 5% exposure doesn't destroy me if I'm wrong. But if I'm right, and this thing goes three, four to one, it's going to have a magnificent effect on the portfolio. But forget about clients saying, hey, what the hell are you doing to Bitcoin? It's the call like, I'm firing you tonight, you own Bitcoin. OK. And by the way, I've done that calculation. I've said, OK, I'm going to get 5% of the people that fire me.

Bitcoin's going to be up 300%. So my Bitcoin exposure, I will make a prediction right here on your podcast that the SkyBridge Bitcoin exposure will outpace who's ever redeeming from us as a result of our Bitcoin exposure. So to me, it's a value exchange, if you will. Well, that was, I'm assuming, in the earlier days, have you seen a benefit from new customers coming in who are interested in Bitcoin and like the fact that you're exposed? Small. Consistent with what you and I know about institutional adoption. It's small. You know, yes. The answer is yes, but it's small. But I bet you two years from now, the answer will be yes, and it'll be more sizable. That makes sense.

The irony of Bitcoin is the higher its price, the easier the adaptability will be. Of course. Amazon at $41, it could go to zero. Amazon at $3,000, I'm buying it. Let me watch Jeff Bezos fly to the moon. It's absolutely true. So do you think that we need a vehicle like an ETF to achieve that level of adoption or security or for this big wall of money from pensions and endowments to be able to confidently invest in the asset? Yes, is the short answer. Now, I have an ETF application in right now, so I'm not allowed to speak about these ETFs. Unfortunately, I'm in a quiet period. But yes, is the short answer. The more user-friendly products, the more ease of storage, the more confidence that people have, the more likely they will invest. Do you think that there's a number of market cap where it becomes reasonable for the larger money? It's like you said, you sort of have this cognitive dissonance. You can't buy it because it's cheap. You need it to actually to be more expensive to gain exposure and know that you'll have the liquidity or be able to enter and exit.

Do you think that there's a level that we need to be watching where all of a sudden this wall of money can enter? I do. I think if it sustains itself over a trillion dollars in market cap. So it was there briefly for probably a six-week period of time. But if it were actually to sustain itself, meaning it got there, and you could see that it had reached escape velocity, and to what Plan B talks about is stock-to-flow model, the supply has tightened, and the demand is robust, then yes, I think people will start adopting it. And remember, you are buying something. Remember, you're buying something. When someone says to you, well, it's technologically worthless, it's just a cryptograph. I was listening to Senator Elizabeth

Warren discuss it. And I was like, OK, wow, she really is this unknowledgeable, which is actually scary because she's making the laws of the United States. But then the other thing is she's supposed to be for the little guy. And so she sounded like a central banker when she was talking about it. I mean, Bitcoin is for the little people. It's not for the big people. Bitcoin is an empowerment move. But I would say when you step back and you look at the whole landscape of everything, if we get this right, Bitcoin will improve the society and it's worth something because

of its network. Don't think it's worthless because it's a cryptograph. There's a network effect. It's the same way all these phones tied to each other is worth something. It's the same reason, you know, I use this example earlier today, and I'll share it with you. I was thinking about it over the weekend, an old fashioned network, Coca-Cola. It's a bottler, a distributor, it has trucks, and it moves beverages across six continents. Coca-Cola. Coca-Cola is the second most recognized phrase in the English language. Number one is okay. Number two is Coke or Coca-Cola. Everybody knows what it is. If we

destroyed all the bottling plants, destroyed all of the equipment related to Coke, and we went to Wall Street and we said, we had these two words, Coca-Cola, we'd like to raise billions of dollars to recreate that. Could we do it? And the answer is yes. So there's a value in the network. The word Bitcoin, 125 million users, scaling to a has value or amazon.com has value. These are locations where a network exists. And in Bitcoin's case, it's a store of value network or a monetary network. And on its own, that in itself is quite valuable. What does Bitcoin look like at a billion users? That would be a different world. Well, I'm going to be very simplistic. A billion users is roughly eight times more than we are right now. And so Bitcoin, I actually think we're undervalued and technically oversold here. So I would have thought that Bitcoin would be where

we are in terms of users at 50,000. So intrinsic fair value to me would be about $400,000 a coin at a billion users. Because again, you have fixed supply and you've got less than 21 million coins out there. You and I both know that the mining finishes 2140, you know, in the year 2140. But you've also lost coins in the process of adoption. We've probably got two or three million coins that have been misplaced. They could be in a landfill. They could be on an old BlackBerry or somebody's laptop that was jettisoned in 2010. And so a result of which you've got probably 18 million coins in the universe. Let me point out something that JP Morgan has said. There are 48 million millionaires

on planet Earth, according to JP Morgan. Well, there are only 18 million bitcoins in existence. You don't even have enough bitcoins for every millionaire on planet Earth to own one coin. So you can't tell me that the scarcity properties of this are not going to drive prices higher. And remember, what are you getting from Bitcoin? Store of value component. You're getting the transferability, the ease of transferability, the impregnability of the blockchain. These are super valuable things if you really study money, the ascent of money and the history of money. As you said earlier, Bitcoins obviously get it. We see money being printed. We see the monetary supply increasing 40% in a year. You're on Wall Street. Do they get it? Do they see it? Or do they just see stocks going up and its general state of euphoria and they don't even worry about hedging against it with something like

Bitcoin? So Wall Street's the last to get these things. The last place. Wall Street is part of the collective society, the collective wisdom of society. I don't, you know, there may be a madness to crowds, but there's also a wisdom in crowds, you know, ultimately crowd psychology when you're in the markets is the collective wisdom of something. And Wall Streeters by and large are going to wait the same way they waited on Amazon, the same way they waited on Microsoft. You know, I've been a holder of Microsoft since 1991. I was 27 years old. I started buying Microsoft and I was buying in drips and drabs back then. And, you know, I bought and held it.

30 years later, I've got a nice position in Amazon. I'm sorry, Microsoft. But when I was learning about Microsoft in 1991, the Wall Streeters were complaining about the move from 1986 to 1991. They'd missed the move. But now we've got a strong buy on Amazon. It went public in 86. And so I started buying it in 91. And then Wall Street kaputs on Amazon.

Right. I'm sorry, Microsoft. Remember, it flatlined for many years. Then it went down for many years. Then during the bomber years, it was a quite lackluster company. So you could have sold your Amazon and you could have been juked out of your Amazon. And so, you know, the point I'm trying to make it, but if you stay it in, you got rewarded over the 30 years. And so you got to be long-term in your thinking. And the Wall Streeters are, they think they're in the investment business. I always tell people we're actually in the fashion business. Skirts go up, skirts go down. We're into private equity. Then we're out of private equity. If you and I were doing this podcast in 2007, we're investing like college endowments. In 2009, after the crisis, we had to have an ATM machine,

instant liquidity in our lobby of our hedge fund. Now today, we're into private equity and venture and Bitcoin. The point being is Wall Street is moving around like the fashion industry. And they're usually the last people to adopt. When you see Goldman Sachs write a brilliantly positive story on Bitcoin, call me. We'll probably have to lighten up on our position a little bit. Absolutely. But I mean, with regard to money printing, I remember 2008 and thinking a couple hundred billion dollars was astounding, unsustainable. It would be impossible. We'd see crazy inflation. And now we throw around trillions like it's candy, right? I mean,

a trillion here, a trillion there, three trillion there, and nobody seems to flinch. I just don't get it. Well, here's what I would say to you. And this is the most distressing thing I'm going to say. If, if you had an easy solution that didn't cause you any political angst, and it didn't cause you to lose your political power, would you take that solution? If you were a, if you were Pavlov and you were a rat and you could press one lever and you got icky bitterness from it and you press another lever and a sugar cube came out, which lever are you going to push? And so what I'm concerned about in our society now is that we're thinking like that. So we're not going to build the infrastructure. We're going to light on infrastructure. We're going to go light on the re-education of the

United States in terms of evening the public K through 12 education. We're going to light on infrastructure we're going to go light on the re-education of the united states in terms of evening the public k-12 education we're going to go light on long-term fiscal spending like reshaping the electric grid reshaping 5g making best-in-class networks for our citizens and we're going to hand out money. That's what we're going to do. So all we're focused on is this very simple, short-term, easy solution. And if you read Nakamoto's white paper, the group known as Nakamoto, they very simplistically explain to you that is the natural order of human beings at the end of an empire. They don't want to make the hard decisions. The hard decisions were made in the 1890s, made in the 1940s. They're made in the 1950s during the Cuban Missile Crisis and the rise of Sputnik, but they're not being made today. What's happening today is we're going

to print money. The country's used to the money printing. Oh, by the way, it has very deleterious effects on middle and lower middle income people because they can't catch up as a result of the wages and the rich get richer. Now, I'll say this to you because you're a student of history, but I think it's worth reinforcing. After Bretton Woods, when we had a tight trading ban and we had imposed fiscal discipline among the nations, we had our greatest aspirational generation from 1944 to 1971. We had rising living standards in the West. When we decoupled ourselves and became a fiat currency in the United States in August of 1971, 50 short years ago, think about what we did, a dollar and the ounce of gold, $35 per one ounce of gold. Today, it's $1,700 per one ounce of gold. We crushed our dollar. We took our dollar down 99% in 50 years.

I want you to think of the magnitude of that. You have a dollar of purchasing power for a $100 bill today. Think about the magnitude of that. I'm going to make you laugh for a second. There is Monopoly, the first game of Monopoly. There were $6,000 Monopoly dollars in the game itself. So it came out in the 1930s, that game. If you go to eBay, that game was purchased for $2 in 1935. You got to buy it for $600 today in mint condition or $1,000. The monopoly money inside the game has gone up in value compared to the dollar that has gone down in value.

So the monopoly money in game one of monopoly is worth more than the US dollar over the last couple of years in terms of it becoming a collectible. My point, my point being is this is something that you're not going to stop. You're borrowing 55 cents of every dollar that we're spending. You tell me when we're going to right size that or when we're going to right-size that or when we're going to correct it. So can either political party at this point make any claim to being fiscally conservative or fiscally responsible, or is it two sides of the same coin, the printer goes burr? No, it's two sides of the same coin. Let me make you cry for a second. We entered January of 2009 with an $8 trillion U.S. budget deficit. In 13 short years, that's Barack Obama, Donald Trump, and a little bit of Joe Biden. Okay, 13 short years, we've added $20 trillion

to the deficit. So from George Washington to George Bush, $8 trillion. And by the way, if you took out Bush, it was for Trump. So I mean, he was a profligate spender. But we're now at $20. So you tell me. And what I know is that has a regressive effect on the middle and lower middle class. It hurts them in a way that I can't fully describe. Because I grew up in the middle class. It hurts them in a way that I can't fully describe, you know, because I grew up in the middle class area. My parents didn't go to college. My dad was a laborer. He worked by the hour. And I can tell you that his friends and that generation of people, and I'm one of the few people in my family that actually went to college. I'm the only person in my family at my generational level that went to law school. And I can tell you, I've got clamors out here on Long Island, deli owners, auto glass installers. I've got a whole

collection of people that are my age that live in the brew collar world. And it's almost impossible to keep up. It's almost impossible. So what's the end game? How does that end? Well, you know, it ends the way it typically does. You know, what ends up happening, we go through a further monetization and then we get a point of expiration where you can't do that anymore. And then you have to adopt a new standard. You know, you have to do what El Salvador did. OK, you have to say, OK, nobody trusts our fiat currency anymore. And so we're going to move to a dollarization of our fiat currency. Wait a minute, they're not

trusting the dollar anymore. Okay, what can we move to that they'll trust? And I think what Nakamoto said is that something that's decentralized, that can't be affected by politicians or policymakers is where we're going to go. So is it a pipe dream to say that when that inevitable explosion of the dollar or any other currency happens at a Bitcoin standard is possible? Is that a pipe dream or do we just see new dollar, digital dollar, whatever it's called? Remember, if it's a new dollar, it's always subject to the whim of the fiat policy and politician

movement. So if they don't standardize it and they don't cap it, then you'll always have that capricious outcome. So yes, I mean, they could reset it that way. Or they could move to something that's more standard. It may or may not be Bitcoin. But I think Bitcoin's got a slot. It's either Bitcoin or Bitcoin's a store of value and it's some other cryptographic currency, or maybe it's a basket.

Maybe the fiat currency central bankers get together and say, okay, listen, we're competing against Bitcoin and this basket is going to be 25% dollar, 25% renminbi, 25% euro, and 25% the rest of the world's currencies. And we're going to fix the price at one. And we're going to digitize that. And it's going to be a global fiat currency. Good luck with that, though, because look at how they fight in the European market. Remember, the euro is not a currency. That's a fixed exchange rate system. Those countries are not abiding to any level of federalism, if you will, where they're conjoined at the budgetary level. All they are is a fixed exchange system, basically, among those countries. So I can tell you you axiomatically, there's been no fixed

exchange mechanism that's ever survived. They all get broken because of the nature of these things and the way politicians move things around. It's terrifying to think about. I know that we're out of time here. Where can everybody keep up with you after this? So we do on Wednesdays a Bitcoin review. You can go to skybridge.com and we do a live Bitcoin review, 4 p.m. Eastern time on the East Coast of the United States, Bitcoin review. We do a newsletter. You can sign up for our newsletter. Just go to skybridge.com and you can find our Bitcoin newsletter, which is out every week. I'm on Mooch FM, a podcast once a week, which you're going to have to do a home and away now. Scott, I got to invite you on my podcast. I'm ready. I'm going to reach out. And then we have the SALT talks. We have our conferences, which are

live conferences prior to the pandemic, soon to start up again in September. That's salt.org. And then we have a series of SALT talks where we invite people on that are authors, politicians, policymakers, generals, CIA directors, and a whole slew of different people that we ask about the world and where the world's going. So yeah, we've got a lot to say and we're putting our money where our mouth is. And I think we're going to be right. But you know something? I'm smart enough and humbled enough by markets to know that it could be wrong. So I always tell people, size yourself appropriately, but think very, very long term. Be patient. Patient in investing. If you're investing

in high quality things and you're patient, you're going to win. That's been my message. I think that's as good of a parting message as we can hope for. Thank you so much for your time. I really appreciate it. We will definitely follow up soon. Thank you for having me on, man. That was great. I appreciate it. Bye.