With the Russia-Ukraine war is in its third week and with the U.S. February consumer prices at a 40-year high, some investors are worried that higher-than-normal U.S. inflation could last anywhere from a few years to a full decade.
However, Anthony Scaramucci, founder and managing partner of Skybridge Capital, believes that the U.S. inflation data will be “way better” in a year.
Scaramucci said he expects the Ukraine war to have limited impact on the global economy in the long term. “I predict that these wars will not last that long because of the pain being inflicted in a society with that type of economic crippling,” Scaramucci said, citing rounds of Western sanctions against Russia.
The U.S. has banned Russian oil and other energy imports, while several Western countries have frozen Russian central bank’s assets overseas and removed some Russian banks from SWIFT, a payments-related messaging service based in Belgium that helps banks world-wide execute financial transactions.
“It’s one thing to put on some mild sanctions here and there, but the West is basically dismantling the infrastructure and the wealth around Vladimir Putin and his inner circle. That is a very big step that the Western democracies are taking,” Scaramucci said in an interview with MarketWatch this week.
Even as the war persists, “it will be less disruptive,” Scaramucci said. “This could be an Afghanistan situation for Russia, where it goes on forever, but it will not create supply shocks once the free market system adjusts for it.”
Bitcoin at $100,000?
Though Scaramucci calls himself a “bitcoin bull”, he doesn’t believe that the cryptocurrency
could be used as a hedge against inflation yet. Instead, investors have been drawn to its growth potential, Scaramucci said.
“I see bitcoin in its current status as an early adapting technological asset,” Scaramucci said. “I think bitcoin will be used by many Latin American countries as legal tender over time, not just El Salvador, but other countries.”
Scaramucci expects more than a billion wallets to hold bitcoin by the end of 2025, and the crypto’s users to reach 2.5 to 3 billion in the next decade. “When it gets there, then I think as a mature asset, we could have a conversation about whether or not it operates as an inflation hedge,” Scaramucci said.
As bitcoin has a maximum supply cap of 21 million, increasing adoption could drive the cryptocurrency’s price up to $100,000 in the next 12 to 18 months, according to Scaramucci.
The crypto was trading around around $38,737 midday New York time on Friday, down 1% over the past 24 hours, according to CoinDesk data.
In October to November 2020, Skybridge invested 4% of its $2.4 billion Series G fund in bitcoin, when the crypto was trading in the range of $12,000 to $20,000. The position has risen to about 15% of the fund, Scaramucci noted. “It’s mostly born from the [price] appreciation and not from add-ons. We added about an additional 1% exposure.”
Scaramucci said he also doesn’t expect ether
to overtake bitcoin as the largest cryptocurrency, a scenario usually referred to as “flippening.” As a smart contract blockchain, Ethereum faces intense competition with other blockchains such as Cardano
Avalanche and Polkadot
according to Scaramucci.
These other blockchains “will end up taking market share from Ethereum,” Scaramucci said. “Maybe they won’t take market share to the extent where Ethereum will get knocked out of the number two position, but I think they’ll take enough market share that it’ll never reach the number one position.”
Ether was trading at around $2,560 on Friday, down 1.6% over the past 24 hours.