Hollis Johnson/Business Insider
Individual investors don't need to commit a lot of portfolio exposure towards bitcoin to benefit from its upswing, crypto enthusiast Anthony Scaramucci told Bloomberg TV.
He recommended that a 1%-3% exposure was sufficient, though more aggressive investors may prefer going up to 5%.
"I'm making the case that this is a store of value asset. This is effectively digital gold," the SkyBridge Capital founder said on Monday. By that comparison, he said that bitcoin's market capitalization could eventually reach as high as $12 trillion.
"So bitcoin's got a lot of room ahead, but again, small pieces for individual investors is what we recommend," Scaramucci said.
His own firm began with a 5% exposure, but it has grown as bitcoin appreciated, he said. Since the start of 2023, the world's biggest crypto token has jumped 145%, and was sharply boosted in the past month amid renewed enthusiasm around events including the potential regulatory approval of a spot ETF and the halving coming up in 2024/
If approved, spot bitcoin ETFs are expected to direct fresh demand into the market, helping the token reach as much as $150,000 by 2025. Supply-side factors will also drive the upside, especially with a bitcoin halving cycle scheduled for April.
Since last week's gains, bitcoin has slid aggressively, with a steep slide in a matter of minutes Sunday evening erasing most of the gains over the prior week.
Given that bitcoin should be a long-term investment, Scaramucci also noted that it will help diversify portfolios and decrease correlation risk.
"If we're right, it will impact your portfolio positively, it will offer some lack of correlation to some of the other assets," Scaramucci said. "If you look at monthly returns this year in bitcoin even when the S&P was not doing well, bitcoin did well. And it does have over time I think a decoupling effect to the stock and bond market."
