This week, Anthony Scaramucci’s SkyBridge Capital announces the launch of its investment thesis, presentation and full website for its new Bitcoin Fund LP. Unlike other investment firms, it has gone a step further to explain why it is actively choosing bitcoin over gold.
The main fund of SkyBridge Capital, with $ 9.3 billion in assets under management (AUM), has invested a position of about $ 300 million in bitcoin. In December 2020, he announced that he was raising a new, separate bitcoin-only fund and had already transferred bitcoin worth about $ 25 million into it.
This week, the fund opened to accredited investors with a minimum investment of at least $ 50,000. This bitcoin LP will not trade, but you only pay an annual fee of 0.75 percent and no premium. The portfolio is priced according to the fixed rate (XBT) of Bloomberg. This is in contrast to GBTC (an grant trust) which trades OTC, has an annual fee of 2 percent and includes a premium on the price of bitcoin.
SkyBridge’s website is an extensive library of information. It presents its memorandum, investment presentation and investment thesis. It also includes:
At the bottom of the site, it also pays attention to the premium of GBTC and offers it to walk through a ‘GBTC swap’ to its fund. It understands the barriers that many traditional investors face in investing in and relying on bitcoin.
But more enjoyable than reading the funny digs at GBTC is reading the digs on gold. Because other large institutional investors recently bought bitcoin, they did so largely while still owning gold.
An example is Ruffer’s ($ 27 billion AUM) recent $ 775 million bitcoin purchase through its multi-strategy fund, which was about 2.5 percent of the portfolio. It was a big step, but still very small compared to the gold and inflation linked bonds.
Another example was when the head of global equities at Jefferies recently cut the gold exposure in the only pension funds in favor of bitcoin. But even after that, bitcoin remains a 5 percent allotment versus 65 percent gold and gold mine ownership.
With an MP only for bitcoin, there is no question about the question “why bitcoin versus gold?” SkyBridge has to tackle it from scratch, and it does. Its investment thesis is ten pages (excluding legal disclaimer) and about one-third of it focuses on why gold is less than bitcoin and how bitcoin will be gold 2.0.
It quickly realizes that there is a need for a deflationary asset – rising debt, rising money supply and low interest rates.
It then quickly asks, “Is gold helpful?”
No.
The key points it offers for pro bitcoin versus gold are:
- Fixed versus limited supply (the gold stock increases by about 1.25 percent supply per year)
- The technology industry will be the main driver of marginal wealth creation – a digital asset to match
- More wealth is being passed on to millennials – bitcoin portability and storage fit into this demographic
The thesis also contains a summary image:
The SkyBridge offering expands on gold 2.0, beyond the investment white paper, and explains why bitcoin is better and also uses gold as an example of potential growth.
Its opening page states that ‘Bitcoin is better at being gold than gold’ and cites gold’s current market capitalization as an example of where bitcoin’s price can grow.
The presentation and thesis continues by treating Halvings, growing adoption and bitcoin as a portfolio diversifier. But the most interesting aspect remains the fact that an institutional investor pays direct attention to the question “why bitcoin above gold?”.
All in all, the launch of the SkyBridge Bitcoin LP is another strong step in the acceptance of Bitcoin by investors. It takes note of the problematic premium with GBTC for investors and expresses the main reason why an institutional investor would choose bitcoin over gold.
This is a guest post by Ellie Frost. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.
