Anthony Scaramucci is jumping on the Bitcoin bandwagon with the SkyBridge Bitcoin Fund, which has been filed for approval by the Securities and Exchange Commission.
Scaramucci, who was not available for comment for this story, is launching the fund to accredited investors through his $9.2 billion hedge fund shop, SkyBridge Capital. Sources familiar with the planned launch say the fund is being seeded with $20 million by the hedge fund and its affiliates.
The SEC filing does not include a lot of details but does state that the new fund will have an investment minimum of $50,000. It is expected to start accepting outside investments during the first week of January.
Despite several attempts by a handful of firms to secure approval, the SEC has not yet given permission for a traditional retail-oriented fund investing in the cryptocurrency, which would pave the way for access to investing in Bitcoin through retirement accounts.
So far, the closest thing to a retail Bitcoin fund is the $13.3 billion Grayscale Bitcoin Trust (GBTC), which charges a 2% management fee and employs a grantor trust structure that allows it to trade out of sync with the underlying net asset value.
“The shares trade freely based on supply and demand, and right now it’s trading at a 30% premium, which means you’re getting exposure to Bitcoin but you’re paying 30% more for that exposure,” said Chris Kuiper, vice president of equity research at CFRA.
Kuiper, who published an Investor’s Guide to Bitcoin research paper earlier this month, said the appeal of Bitcoin across the investor spectrum will continue to drive the kind of innovation seen by SkyBridge and others to provide easier access to the popular digital currency.
“Bitcoin has gone through a few narratives, but it’s now moving toward an alternative to money, almost like an improved version of gold, and that’s what’s attracting institutional investors,” he said.
As an alternative to gold for hedging inflation, for example, Bitcoin’s annual inflation rate of 1.78% compares to the long-term average of the U.S. consumer price index inflation rate of 3.2%, and a global average inflation rate of 2.99%.
It would be difficult to assume when or how a registered mutual fund or exchange-traded fund offering access to Bitcoin will gain SEC approval, but Kuiper said that is the ultimate effort for asset managers.
“The anticipated demand for a true 40-Act fund could be huge,” he said. “A lot of people see Bitcoin and they want exposure but don’t know how to buy it. A 40-Act fund would be a homerun. Everyone has wanted to do that for years, but the SEC hasn’t allowed it yet.”
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