Bitcoin will not ensure inflation until it reaches 1B wallets: Scaramucci
The Skybridge Capital chief said Bitcoin needs much more diversification before it can act as an inflation hedge.
Skybridge Capital CEO Anthony Scaramucci believes that while Bitcoin continues to be an attractive asset, it has not reached the “wallet bandwidth” required to be considered an inflation hedge.
Speaking on CNBC’s Squawk Box on August 22, the global investment management chief said that Bitcoin was still too much of “an early adopter technical asset” that would need to be held in around a billion wallets before it would begin to function as a hedge against inflation.
Until you get into the billion-billion-plus zone, I don’t think you’ll see Bitcoin as inflation [hedge] as it is still an early adopter technical asset.
While the exact number of Bitcoin wallets in the world is unknown, estimates place this number at approximately 200 million.
In the earlier years, some touted Bitcoin as a potential hedge against inflation, given its fixed supply of 21 million coins. However, this narrative has changed over time, as Bitcoin has been observed to be increasingly correlated to the stock market, according to a new IMF report.
“#Bitcoin is still not a mature enough asset to be seen as a potential inflation hedge,” says @scaramucci on $BTC. “You just don’t have the wallet bandwidth with Bitcoin. It’s still an early adopter technical asset.” pic.twitter.com/YTsy6W3HGU
— Squawk Box (@SquawkCNBC) 22 August 2022
Scaramucci said he remained bullish on Bitcoin and the overall crypto market, pointing to recent moves by BlackRock to launch a new private spot Bitcoin trust with Coinbase as custodian — a sign that there is strong institutional demand for the leading cryptocurrency.
Scaramucci believes that the markets are currently filled with a lot of short positions, which can cause people to have their “faces ripped off when they least expect it.
In a recent interview with Cointelegraph, Steven Lubka, managing director of retail clients at Swan Bitcoin, argued that Bitcoin should still be considered an inflation hedge.
While Lubka agreed that Bitcoin has failed to act as an inflation hedge during the global inflation events this year, he believes that this inflation has been mainly caused by supply shocks rather than monetary expansion – where Bitcoin is able to hedge against inflation more effectively.
At the time of writing, Bitcoin’s price is currently $21,406, down 69.01% from its all-time high of $69,045 on November 11 last year.
Also speaking on ‘Squawk Box’ on Monday, Coinshare chief strategy officer Meltem Demirors said she expects Bitcoin prices to continue to remain flat throughout the third quarter as the price correlation between tech stocks and cryptocurrencies continues.
“With #Bitcoin we’ve seen a lot of buying on dips,” says @Melt_Dem. “While internally there is a lot of enthusiasm within #crypto society around the merger… I don’t think a lot of new capital will come in to buy #Etherium on these changed fundamentals.” pic.twitter.com/8KBiRHfT1f
— Squawk Box (@SquawkCNBC) 22 August 2022
