Scaramucci defends MicroStrategy’s Bitcoin spending, says there is nothing for investors to fear
Anthony Scaramucci, the founder of SkyBridge Capital, thinks people are blowing things way out of proportion when it comes to MicroStrategy’s Bitcoin buying spree. Critics say CEO Michael Saylor has gone too far by taking on billions in debt to buy Bitcoin.
Scaramucci says those critics don’t understand the company’s balance sheet or Saylor’s strategy. In his own words:
“People think if Bitcoin crashes, he’s going to implode. But you’d need a full-blown Bitcoin collapse lasting six or seven years to really hurt him. His debt is structured long-term, and it’s not rolling over any time soon.”
MicroStrategy’s debt-fueled Bitcoin obsession
MicroStrategy has transformed itself from a dull software company into Wall Street’s top Bitcoin proxy. Its stock has skyrocketed over 400% this year, fueled by Saylor’s unapologetic strategy of using convertible debt to load up on Bitcoin.
As of press time, the company has $7.2 billion in outstanding convertible debt, including $6 billion raised this year alone. It’s bold, risky, and completely unprecedented.
Some investors are sweating bullets, thinking MicroStrategy might be forced to sell its Bitcoin stash if prices fall sharply. Such a sell-off could flood the market with tokens and drive Bitcoin’s price even lower. But Scaramucci doesn’t buy into the doomsday scenarios.
“The narrative of him being forced to sell hundreds of thousands of tokens into the market—it’s a forced narrative,” he said. Scaramucci, who has spent 35 years on Wall Street, claims he knows what implodes companies.
He compared Saylor’s debt strategy to Lehman Brothers’ downfall and said there’s no similarity. MicroStrategy’s convertible bonds have become a favorite for arbitrage traders, who exploit the volatility of Bitcoin’s underlying value.
Meanwhile, SkyBridge’s own ETF, the First Trust SkyBridge Crypto Industry and Digital Economy ETF lists MicroStrategy as one of its top holdings.
“Saylor’s got this figured out,” Scaramucci said. “He’s issuing debt and equity to create a positive flywheel. This isn’t some reckless gamble; it’s a calculated move.”
Bitcoin’s wild ride after Trump’s election win
Bitcoin’s price action has been a rollercoaster lately. After smashing past $108,000 earlier this week on the back of the Trump rally, it dropped below $93,000 before clawing back to around $97,000 as of press time.
Much of the recent volatility stems from the Federal Reserve. Investors are spooked after the Fed said it will scale back interest rate cuts next year. That’s hit equity markets, and the chaos has trickled into crypto.
Still, Bitcoin’s performance this year has been nothing short of insane. The price has more than doubled, fueled by many big catalysts. But as we know, the rally always cools eventually.
And Scaramucci isn’t blind to the risks. “Could we see a 30% or 40% correction in Bitcoin next year? Sure,” he said. “It could drop to $60,000 or $70,000, no problem.”
But he doesn’t see Bitcoin going below $50,000 anytime soon, especially with favorable legislation on the horizon and more institutional money coming into the market.
Scaramucci even threw out a wild number. “Could Bitcoin’s market cap hit $18 trillion? I think it could. It’s not going to be a straight line, but it’s absolutely possible,” he said. For context, Bitcoin’s market cap currently sits at $1.9 trillion.
Meanwhile, Bitcoin’s dip has dragged down other cryptocurrencies. Ether fell 9%, and XRP dropped 10% in the last 24 hours. Even Tesla, another major post-election winner, saw its stock slide. Same thing with Nvidia, the AI darling.
