Episode 11 | Part Two: SkyBridge and the World of Tomorrow

Gregory Shepard, an entrepreneur who's built and sold 12 businesses, a recipient of 4 private equity awards, TEDx speaker, and Forbes author. This is The Boss Podcast with Gregory Shepard.

Welcome back to the second part of my conversation with Anthony Scaramucci, the founder and co-managing partner of SkyBridge. We've been discussing his company's leap into the deep end of the cryptocurrency pool with SkyBridge Bitcoin Fund. Anthony, Bitcoin devotees say that in some ways the pandemic proved the perfect environment for the digital coin. What do you think of that thought, and what do you think about that acceleration going into this year?

Well, remember, the coin collapsed in, uh, March. You know, these coins were down to $3,500, so they've had almost a 9-to-1 pop from March. Um, and again, because it's a nascent space, if you're not prepared for that level of volatility and that sort of price-shocking movement, then you shouldn't be an investor. But, but what— here's what I would say, uh, COVID-19, for almost every aspect of our modern economic society, was a force accelerator.

Yeah.

And so what have we learned in COVID-19? We can work more from home. We can work more by Zoom or over the internet using our Wi-Fi technology. Uh, we can remote access into our servers at work. and we can create an experience. Now, that's the very good news for white-collar people. Blue-collar people, unfortunately, by and large have to be present at their jobs. And so the economy has once again split between the haves and have-nots. There's societal danger in that, which I'm happy to discuss, and we can talk about ways we could fix that. But here's what I will say. There's only one policy that the Federal Reserve can come up with to help. And that is to print money. And they added a tremendous amount of liquidity into the marketplace. They took interest rates down to zero. They hammered them down for 3 years. And so if you're sitting here, you're looking at US monetary supply, US money supply is up 25% since the start of the pandemic. Oh boy, that is a perfect recipe for something like gold as a store of value or something like a Bitcoin as a store of value. Or people are saying, okay, well, wait a minute, you just told me the US dollar is a terrific store of value, but you have an infinite supply of dollars which can be manufactured electronically by the Federal Reserve. And oh, by the way, you put up 20% more money into the system in 2008, and now you just added an additional 25%. Uh, and then look around the world, Greg, you, you see all of this asset inflation In terms of real assets, property prices, stock prices. You may not be picking it up in terms of wages, so you don't have inflation at the cost of living level in terms of that cost of living adjustment level. But look at what's going on with Hamptons real estate or prime real estate around the world. And so that creates this perfect environment for something like Bitcoin. It accelerates the trend. where people are saying, okay, I can no longer trust the global central banking community to preserve my hard-earned work effort. Because if I'm storing it in dollars and you're creating 25% more dollars, those dollars have just intrinsically become less valuable.

Mm-hmm.

Therefore, Bitcoin becomes more valuable if you think about it in the context of its scarcity And in the context that it is becoming an acceptable standard for people in terms of value transfer between each other.

So basically the new gold, going back to what you said earlier.

It's digital gold. In fact, if anything, it's better than gold because of its storability, its ease of transferability. And for these reasons, it's actually safer. Yeah, and safety. And so for these reasons, we can see it trading to gold's market cap. And so you, you're at $500 billion, gold is at $9 trillion. So you're saying to me, Anthony, you think this could go up 9 to 1? You could have coins at $270,000 a coin? Uh, yes, I do believe that. But let's say I'm wrong and I'm wrong by half. You still have coins at $150,000 a coin. And that makes this an early entry point. Let me take you back to the Amazon example for a second. If you and I were talking about Amazon.com in 2000, prior to the tech bubble collapsing in March of 2000, and then the tech bubble collapsed and Amazon lost 50% of its value, which it did, we'd be running from Amazon, or should we have been running towards Amazon? Now what we would have said is, well, we missed it. Amazon started in 1997 and went up 10 to 1. Now it got cut in half, it's 5 to 1. Well, we missed it, but did we really miss it? Look at what Amazon's done over the next—

the next— Yeah, you missed part of it. Yeah, not all of it.

My point is Bitcoin is sort of like that. It was the story du jour, it crashed, it's come back, it's robustly rebounded. But there is a technological superiority to Bitcoin, certainly more technologically superior than gold. And so for us, we're very comfortable with it long term. We're very comfortable in a buy and hold strategy. And since we've done this with other asset classes like hedge funds, we wanted to democratize it. We wanted to open it up to people with an easy solution, a one-step process. You go to our website, skybridgebitcoin.com. It's all there. There's some information related to why we are—

You can actually just go to skybridgebitcoin.com and just invest right there. You can invest right there.

Okay, if you decide to do, you have to have you have to be suitable. You have to be an accredited investor and meet those standards, and you have to sign and attest that you are one, and then we'll accept your money. And then you have a three-month lockup in the coin or the or the fractions of coins that you can buy. Listen, I'm super excited. We've already had a very robust response to what we're doing, and you know, away from the Bitcoin fund itself. You know, we have about $270 or $310 million of assets in Bitcoin right now, but we have about $270 million or so across our product platform. And I will say this, that, that smaller allocation, which is, you know, a 7 or 8% allocation across our platform, from a cost perspective, Greg, it was, it was a 4% allocation. It's grown to 7 or 8%. As a result of appreciation, huh?

Well, I have three more questions for you. I know your time is really valuable, so I appreciate you bringing me on.

Thank you.

Yeah, I have. I want to ask you a question. So when I was talking to Tim Draper, one of the things that he said is he thought that once women got more involved with Bitcoin, that it would go mainstream. And my question is, what are your thoughts on that, and how long do you think it'll take for that to happen?

I think he's saying women for what reason though exactly because of the Acceptability in the household?

Yeah, yeah, sort of like acceptability in the family, right? So the average investor, you know, sitting down and going, okay, you know, you sit with your wealth manager person and they sit there and they go, okay, we're gonna do asset allocation to this and that, and Bitcoin's not in that conversation. And the sort of the context is more like in that conversation where the, where the wife says, hey, what about Bitcoin? When does that happen? And does that then pivot it to the wealth managers around the world sitting there going, well, maybe we need to go to skybridgebitcoin.com and, you know, start including our clients in this, in this Bitcoin.

Well, I mean, it's a fascinating thing for him to bring it up that way. I think he's making the point that as it gets to be more mainstreamed and people in and outside of our industry that accept it, it's not necessarily women, but just anybody that is outside of the industry that all of a sudden starts to acknowledge and accept it for what it is. Ultimately, that's what turned gold into the store of value that it is, that it became a universal acceptance into that species known as gold. And so I think he's making a point that sophisticates and non-sophisticates being a part of it. Certainly I'm not saying women are non-sophisticated. I'm just using the generic sophisticates or non-sophisticates.

Right, no, I get it. But I mean, you know, in that context, right? You know, where you're in that meeting, You know, and that never— it doesn't come up, but is it, you know, is it going to change everything when it comes up? You know.

I see, I see where he's going. My thing, and, and I know Tim believes this because I've had many personal conversations with him about it, my thing is don't be late on this. You know, my thing is if, if you saw Amazon do what it did, Facebook do what it did, Google do what it did, and let's say you missed it for whatever reasons, you thought it was Too expensive. You didn't understand it. You were an old fogey. Don't be late on this. You got a cut at the apple right now where a neural network is building for monetary value transfer. Again, you had a social network. You have a retail shopping network. You have these other networks that have been built and they've proliferated a search engine advertising network in Google. Social network and Facebook. This is a monetary network. It's diffuse. If someone pushes me back and says, well, there's no army backing Bitcoin like the US government has an army and it has assets— you know, the US government owns 28% of the land of the United States, as an example— I would push back and I would say, well, actually, this is much more libertarian than all that. The army that Bitcoin has is the millions of people that are operating these nodes. We're operating a node at Skybridge, which keeps that network safe. And all of a sudden, that diffusion is a 100-plus million person army, uh, that's maintaining the integrity of the system of Bitcoin. And for those—

I agree. I never heard it that way. That's so well put. I can't— that's the best way I've ever heard it explained.

Well, you know, and for those reasons, Greg, I would tell you that this is A very, very powerful thing. You have the opportunity to get in in on it in the first inning. I would I would do it, and I and I'm putting my money and Skybridge's money and our clients' money, my own personal money where my mouth is in this product, and I want to go out there and try to help as many people as possible understand it.

Well, I appreciate that, and this is certainly doing that. Two final questions, and I say this next one in jest: Your old friend. President Trump has taken a lot of credit for the Dow and the records that were broken during his one and only term as president. Do you think that Biden's administration will improve the stock market and Bitcoin? Do you think that, like, what are your sort of thoughts about this change that we're going to be experiencing here?

So, you know, like President Trump tried to take credit for the stock market move after his election, even though Barack Obama was still president, I sort of feel like Joe Biden deserves some of this move after November 3rd. I mean, people know he's going to be the president. If you want to give President Trump credit for stock market performance while he was president, I, I think it's deserving. He deregulated, uh, he made things a little bit easier. Unfortunately, because of the way he mishandled the COVID-19 situation, the economy did go into a tailspin. We've experienced the worst recessionary forces, uh, since the 1929-1933 Depression. Uh, if you go right up through the U6 employment numbers, you've got almost 30 million people out of work right now. Uh, and so that's incredibly painful. Flip side is you've got the Federal Reserve flooding capital markets with money, and so that's allowing for this, uh, asset inflation. Um, I want to be fair to the president. I think he did some really good things. But I think his rhetoric, and I think the way he handled the crisis, is the main reason why he lost the election. But I do think, in a positive note, this Operation Warp Speed, I think, will be transformational. When people are less passionate about the president, either for or against him, and they're more dispassionate, maybe it's 20 or 30 years from now, the idea that they funded all these pharmaceutical companies And floored them from a risk-taking perspective related to the vaccines was a proverbial moonshot. And the great—if you really understand these vaccines—it will transform the way we handle future pandemics now that we have this RNA-based software technology, if you will, where we can program the vaccine to defeat what's ever coming into our system. You know, it's a new age vaccine versus an inoculation with a dead. Virus or a weakened virus. This is a whole— wholly different way to prevent an infection from a virus. And so, so, you know, look, I want to be fair to the president, but I do think that the, uh, the marketplace, frankly, my experience is that they're tired of the oscillations of Trump tweets, tired of the oscillations of the president's personality, particularly around trade and the variability and a lack of predictability. And I think that the You know, a good percentage of the country, and I don't remember the last polling, but it was like 60%, said no. Unfortunately, President Trump and his administration did not do a good job handling the pandemic. There wasn't a coordinated 50-state strategy, and we needed that level of coordination. It would have led to way less death and better economic activity during the pandemic. So look, I mean, you know, obviously. Once he went after my wife, Greg, that became a non-starter for me. I'm not Ted Cruz. Some of your listeners will probably figure out that if you grew up as an Italian kid on Long Island and someone's going after your wife on Twitter, you're going to go after the guy pretty hard. You know, I, I get it.

Yes.

The wife is called ugly by Trump, and then the father helped to commit the assassination of JFK, and this guy is a Trump sycophant. So I don't know. I mean, I guess that works in Texas. But I wouldn't be able to live in my neighborhood if I tolerated that type of behavior. So roughing up President Trump was one of the great joys of my life thus far.

I have I have one more question for you. The word regulation. This is you know terrifying to everybody in finance, right? So when we talk about the word regulation and coming to Cryptocurrency, what comes up in your mind?

Well, see, that's why some of these crypto libertarians don't like me, because I'm the outlier. I want the regulation. I want the SEC to come into this space, and I want them to regulate it. These standards that they put in place on December 23rd related to wire transfers and the wallet and that sort of procedure, they were acceptable to me. Some of the people in the Bitcoin ecosystem that are Wild West libertarians didn't like it at all. But I see it opposite, the opposite. The more regulation, uh, the more acceptability and the more institutional acceptability. Now you're telling me because we use the dollar as a form of policy, not just economic policy, but we're using it for political policy, i.e., you know, imposing sanctions on rogue states like Iran or a rogue state like North Korea. Because we're doing that, if a Janet Yellen, Secretary of Treasury-designee, or Jerome Powell says, well, we got to stop or outlaw Bitcoin because it's going to encroach upon these things that we use the US dollar for in terms of economic and political policy, then I think some interesting things will happen and they'll be very controversial Contrarian things. I think it'll grow the asset as opposed to shrink it.

I mean, I agree. I got to tell you, I am not invested in Bitcoin, but I'm on your website right now, and I'm gonna I'm gonna do it. And I've had a lot of conversations about this, but you're the most convincing person I've talked to so far. So so I'm gonna go ahead and say that right now.

And I talked to every one of those people: Draper, Saylor. All of the people that are involved, the Winklevii, Tyler and Cameron are very close personal friends of mine. And what got me comfortable is once I could store it at a place like Fidelity that I knew my clients would be super comfortable with, and it no longer had to be on a USB or a smaller company than a Fidelity that has many trillions of dollars of assets, maybe $13 trillion under management or under its supervision, I said, okay, this is for me. This is going to be a gateway Product, and you should. And I'm thrilled. Hopefully you'll do it with us.

I'm doing it with you, my friend. I'm doing it with you. We're in it together now.

I would love to have you as a client, my brother. Thank you. Thank you.

So I really appreciate. I really do appreciate you taking the time. I want to be respectful of your time. I thank you so much. SkybridgeBitcoin.com is where you can buy the coins. You can start out like fifty grand, right? Fifty grand.

Yes.

This has been a great podcast. I really appreciate it. Thank you once again.

Oh, my pleasure. Great to be on. Thanks for checking out the BOSS Podcast with Gregory Shepard. Get more on Greg's Business Operating Support System, BOSS, at GregoryShepard.com. This has been a production of Forbes Books Radio.