Could bitcoin could become the next 'great tech stock' of the decade? Yes, but it will take more than the buy-in of the retail army to get it there, an investment chief says
Bitcoincould become the next "great tech stock" of the coming decade, an investment chief said.
- But only retail traders buying into the coin won't be enough, according to SkyBridge's Brett Messing.
- "It's going to require institutional capital," he said. "Retail can't get it there."
The investment chief explained that just like three of those tech stocks were some forms of networks, bitcoin too is a monetary network.
"Bitcoin is actually going to be the great tech stock over the next decade, in addition to being digital gold," Messing said at a virtual roundtable discussion this week.
According to him, there are two potential outcomes for the digital token in the near future: either it could remain a niche asset and trade between $5,000 and $50,000, or it could grow to be a "real asset" that could easily hit as much as $500,000.
But in order for it to get to even a quarter of that level, "it's going to require institutional capital," he said. "Retail can't get it there."
Bitcoin was last trading at $$32,129 on Friday, almost $10,000 lower than its record high of $41,000 earlier this month.
"It's now a $600 billion asset class. I think it is arguably beyond the point at which it can be manipulated, and I think as it matures, that will become increasingly the case."
SkyBridge Capital, run by hedge fund manager Anthony Scaramucci, invested $25 million into a bitcoin-focused fund that went live on January 4. The "SkyBridge Bitcoin Fund" was launched so that the fund got in before bitcoin's price soars even higher.
The firm's flagship fund is a $7 billion Registered Investment Advisor (RIA), but for the purpose of managing the bitcoin fund, it isn't acting as one. "By doing that, we don't have to satisfy what's called a custody rule under the Advisers Act," Messing said, referring to the issue of custody service by hedge funds who hold large amounts of
But he expects Gary Gensler, President Joe Biden's pick to run the US SEC, to be "very bitcoin-friendly," and that one of his first acts will be to provide clarity on the custody role.
In terms of risks to bitcoin, government regulation is by far the biggest. Just like it is for technology companies.
Messing said: "If you talk to… what is Mark Zuckerberg worried about? What is Jeff Bezos worried about? The thing they worry about the most is the government, and that's the first concern."
A breakdown in infrastructure is another point of concern since bitcoin makes big moves everyday on exchanges that could falter.
Lastly, there could be a greater risk that no one is prepared for.
"We're trying to be crypto-hip, but whoever knew that we'd be sitting here in a pandemic on Zoom?" said Messing. "No one predicted this. I imagine the risk for Bitcoin is one that none of us are going to identify."
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