SkyBridge’s Anthony Scaramucci said bear markets “suck” as his hedge fund suffers amid a crypto winter. He claimed that his fund’s ‘mediocre’ performance triggered his deal with Sam Bankman-Fried’s FTX. SkyBridge is among firms Bankman-Fried has aided as the crypto market crumbles. Loading Something is loading.
Hedge fund manager Anthony Scaramucci lamented bear markets, saying they “suck” because of how much they’ve hurt his business.
Scaramucci told the Financial Times Monday that his company, SkyBridge Capital has suffered significantly during the crypto winter, pushing him to ink a deal with billionaire Sam Bankman-Fried, who acquired a 30% stake in the fund through his venture-capital firm FTX Ventures.
“Bear markets suck,” Scaramucci said. “If I was doing super-well right now — our performance is mediocre, lackluster — who knows if we would be doing the transaction.”
He added the deal was born of poor performance in a poor market, with SkyBridge down 25% this year, valued at roughly $2.8 billion.
SkyBridge has come under financial pressure after its holdings of cryptocurrencies plummeted in the 2022-sell off amid a broader bear market. Bitcoin is down 51% year-to-date as rising interest rates and high inflation, coupled with Russia’s war in Ukraine, have made investors drop risky assets like tech stocks and crypto, as concern grows about recession.
Back in May, Scaramucci told Insider that roughly half of SkyBridge’s then-$3.5 billion in assets under management were linked to cryptocurrencies like bitcoin and ethereum, as well as crypto-related stocks. He also predicted bitcoin would hit $100,000.
Despite the crypto market challenging his optimism, SkyBridge will spend the money from FTX to buy $40 million in cryptocurrencies, which it will hold on its balance sheet, Scaramucci said. He added that the deal with FTX proved to be vital to show SkyBridge still has a future.
“If you have $50 million in liquid assets on your balance sheet, people don’t think you’re going out of business,” Scaramucci said. “It was very important to me to say that SkyBridge is set up for the next 20 or 30 years,” he added.
Amid a turbulent time for the crypto industry, Bankman-Fried has emerged as a savior for struggling crypto firms, throwing financial lifelines out to a string of crypto firms including Voyager Digital and BlockFi.
Scaramucci himself even compared Bankman-Fried to investment banker John Pierpont Morgan, founder of JPMorgan, who bailed out several major New York banks during the 1907 financial crisis.
For Bankman-Fried, the decisions to save crumbling crypto firms were snap judgments that have given “mixed” results.