Owning Bitcoin is a prerequisite to having a good 2021, according to Troy Gayeski of SkyBridge Capital:
We think that, at the end of this year, people could potentially look back and say: "If you had a meaningful Bitcoin position, you had a good to a great year, and if you didn’t, it could be much tougher to perform given all the phenomena that we are discussing in terms of choppy monetary policy, rates, valuations."
In an interview with Bloomberg Surveillance, Gayeski claims that SkyBridge's Bitcoin position constitutes 13 percent of its portfolio. When asked about the cryptocurrency's volatility, he noted that it was "one of the prices" that has to be paid for better performance.
SkyBridge typically targets a 4-8 percent standard deviation, but it has jumped to up to 12 percent in 2021 because of the significant size of the investment management company's Bitcoin position:
It's a unique opportunity where you are actually getting paid for that risk.
"A sweet spot"
As reported by U.Today, SkyBridge—which is helmed by American financier and former director of communications for ex-President Donald Trump, Anthony Scaramucci—launched a $310 million Bitcoin fund in early January.
"The Mooch" has recently turned into one of Bitcoin's high-profile cheerleaders, expecting its price to skyrocket to $100,000.
Last week, SkyBridge also filed for a Bitcoin exchange-traded fund with the Securities and Exchange Commission, which will now have to review a slew of similar ETF proposals.
Gayeski claims that SkyBridge is typically more conservative with its positions, sizing them up over time, but they took a completely different approach with Bitcoin out of fear of missing out:
In this case, it was fairly clear to us that if there was going to be a big move, it would be somewhere in the near term, so we started nibbling in mid-November, we pumped it to 5.5 percent at cost in December, and that’s our full at cost size…From here, we are not adding any capital.
Bitcoin is up 233 percent since mid-November.
While SkyBridge plans to manage its Bitcoin position over time, Gayeski believes that it is currently in "a sweet spot," benefiting from the trifecta of money supply growth, increasing adoption and the halvening cycle.