Skybridge COO Reveals Bitcoin Fund Grew to $ 370 Million

In short

  • Skybridge Capital COO Brett Messing said the company’s Bitcoin Fund has grown to $ 370 million.
  • Messing also said the emergence of the Bitcoin ETF could put the company’s Bitcoin Fund out of business.
  • Institutions have been investing increasingly in Bitcoin, but there is no guarantee that this will continue.

Skybridge Capital’s Bitcoin Fund grew to $ 360 million dollars in its first few weeks, according to COO Brett Messing.

Skybridge never planned to enter Bitcoin, according to Messing. But in November and December 2020, Skybridge invested hundreds of millions of dollars in Bitcoin on behalf of its funds, launching its Skybridge Bitcoin Fund on January 4, 2021 with $ 300 million at the time. And then, with an influx of new currencies and a growth in the price of Bitcoin, the value of the fund rose even higher.

“We currently have a job worth around $ 360 / $ 370 million dollars,” he said Decrypt on Monday (though the price of Bitcoin has dropped 8% since then).

Skybridge Bitcoin Fund

Skybridge Capital is an SEC registered investment advisory firm with over $ 7 billion in assets under management. It is run by former White House communications director Anthony Scaramucci.

Anthony Scaramucci hedge fund runs SkyBridge Bitcoin Fund. Image: Shutterstock

The fund is audited by auditing giant Ernst & Young, and requires a minimum investment of $ 50,000. Investors are also required to be accredited. Refunds are possible quarterly with 30 days notice, and Loyalty is the custodian of Bitcoin.

“Skybridge’s mission was to democratize hedge funds for the wealthy,” said Messing.

As COO, Messing is responsible for the day-to-day operations across its multiple funds. But he says the Bitcoin Fund is surprisingly simple and efficient to run.

“Money is coming in, we’re buying the Bitcoin, and it’s going to Loyalty to a cold store,” Messing said, adding, “I ran a $ 3 billion short-term fund that was much more complex than this, that does not require much from an operations perspective. ”

Skybridge launched its Bitcoin fund this month. Image: Skybridge.

The Bitcoin Fund is also run by Bitcoin extremists, who believe that Bitcoin is – and will continue to be – the foremost cryptocurrency on the market.

“We are very passionate about it, we feel we are doing people a favor by introducing them to Bitcoin, and in success we are making money,” Messing said, adding, “We are ‘ n Bitcoin maximizers, we were not interested in participating in anything else.

Messing’s own journey to Bitcoin began when he was much younger. Now, he applies the lessons he learned in his early investment days to Bitcoin. “When I look back in my life, the best investments were just buying the leader, always, and then sitting back and doing nothing.”

Bitcoin ETF Threat

The Bitcoin Exchange Commercial Fund (ETF) is one of the most expected developments in the Bitcoin industry, but Messing believes it could be bad news for the growth of Skybridge’s Bitcoin Fund.

“The ETF will put us out of business, in the sense that our fund will continue but we won’t be able to raise any capital,” Messing said, adding, “Why do I need a private fund?”

Anticipating this challenge to the Skybridge fund, Messing thought the company would have a one to three year window to generate capital, but that might even be overly optimistic.

“When we launched the fund, we assumed there would be a one to three year window for us to raise capital,” Messing said, adding, “I think now we’ll be lucky if it’s a year.”

The SEC has repeatedly rejected proposals for a Bitcoin ETF. Image: Shutterstock

The Bitcoin ETF may be a challenge ahead for Skybridge, but the future of organizations investing in Bitcoin is also far from guaranteed.

What could stop organizations from investing in Bitcoin

The biggest threat to Bitcoin, according to Messing, is a breakdown of the infrastructure that causes serious investors to lose faith in Bitcoin as an asset.

“The thing we are most concerned about is the breakdown of infrastructure. The fact that Coinbase goes down every time the market moves, I think that is a concern for serious organizations, ”said Messing.

Bitcoin – as well as the rest of the cryptocurrency industry – has already suffered major blows to its infrastructure in the past.

The most notable example of this was when the now obsolete crypto exchange was Mt. Gox was hacked at a time when it handled over 70% of the world’s Bitcoin transactions.

Mt.Gox did not recover and Bitcoin was dealt a huge blow to its legitimacy as an asset.

A similar fall in Bitcoin-centric infrastructure could lead to institutional investors losing their interest in the cryptocurrency. “Instead of having all these Wall Street companies come out, you could have a couple of ‘not ready, not yet, changed our minds yet’,” said Messing.

Then, of course, there is the current threat of anonymity, as Donald Rumsfeld famously said.

“You and I have talked about the pandemic, if we had spoken three or four years ago and asked you to list the top 10 risks to any asset, would you have said so?” Messing said.

So there’s a big dose of uncertainty too.