‘Take a chill pill, stay long’ — Anthony Scaramucci says bitcoin’s recent plunge won’t last

Buyers should cool off on cryptocurrency concerns and make some long-term investments instead, SkyBridge Capital’s Anthony Scaramucci told CNBC on Tuesday.

Some people think bitcoin is “rat poison,” as billionaire investor Warren Buffett once described it; others think it’s the worst thing to ever happen to civilization, Scaramucci said in a “Squawk Box” interview. “Everyone is a long-term investor until you have short-term losses, and then you start freaking out.”

“Take a chill pill, stay long bitcoin, other cryptocurrencies like Algorand and Ethereum, and I think you’re going to be very well-served long-term in those investments,” the hedge fund founder added.

Bitcoin was back above $37,000 on Tuesday, one day after briefly dropping below $33,000. Even with its bounce, the world’s biggest digital coin has been trading way below its all-time high of around $69,000 reached back in November.

Some crypto analysts fear the onset of a “crypto winter,” like the bear markets seen in 2017 and 2018 when when bitcoin plunged some 80% from then-record high levels.

Scaramucci believes buyers need to look big picture when it comes to bitcoin, rather than asking what value bitcoin currently holds compared to a U.S. dollar.

“We’re getting ahead of ourselves. If it’s 2025, and there’s a billion bitcoin wallets, let’s call it a currency,” he said. “The dollar is still the dollar. To me, this is an emerging technology that will eventually evolve into a store value as more and more people join the network.”

Scaramucci caveated his enthusiasm with a warning that bitcoin remains volatile due to low adaptation, particularly among large corporations — Tesla being one of the exceptions. Smaller organizations like hedge funds and small businesses are “nibbling,” the long-term bitcoin advocate added.

“I would never lever an asset like bitcoin because of the volatility and the uncertainty. … It would be like levering Amazon back in 1998, ’99 and 2000,” Scaramucci said, referring to the early years since Amazon’s founding in 1994.

Scaramucci advises his own clients to invest in cryptocurrency, but without getting overexcited. “I don’t want my clients to miss this. I’m telling them to size it appropriately — that’s a 1% to 3% allocation, 1% to 4% at cost.”

“You can let it run, of course,” he added. “But size it appropriately then recognize that this is going to be part of our future.”

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