Sovereign Wealth Funds are increasingly looking to gain exposure to Bitcoin, but the significant allocations won't happen until the United States establishes clearer regulations for the digital assets industry, according to SkyBridge founder Anthony Scaramucci. In a recent podcast with Anthony Pompliano on May 8, Scaramucci, who previously served as the White House director of communications during US President Donald Trump's first term, indicated that while SWFs are starting to buy Bitcoin, large-scale investments are waiting on regulatory clarity.
Scaramucci emphasized the importance of legislative developments in the US, noting that "I don’t think it is going to be a gigantic groundswell of buying until we greenlight legislation in the United States." He also mentioned in a February interview with the Financial Times his expectation of the US government proposing crypto legislation in November.
Sovereign Wealth Funds are government-owned investment funds that manage national savings, often derived from surplus revenues like oil profits or trade gains. Norway boasts the largest SWF globally with approximately $1.73 trillion in assets under management, followed by China with $1.33 trillion, as per data from Visual Capitalist. In comparison, Bitcoin's market cap stands at around $2.05 trillion, according to CoinMarketCap.
Scaramucci further highlighted that if stablecoin regulations are passed, clear guidance is provided for traditional banks to custody Bitcoin and other digital assets, and there's progress on tokenizing stocks and bonds, a significant wave of buying from Sovereign Wealth Funds can be anticipated. He mentioned the potential for "large blocks of buying" from entities worth trillions of dollars, indicating potential investments in the range of hundreds of millions to billions of dollars.
Additionally, Scaramucci suggested that for Bitcoin to reach a million-dollar valuation, a sovereign entity would need to recognize it as a crucial part of the global financial services infrastructure. This perspective aligns with ARK Invest CEO Cathie Wood's bullish sentiment, who recently stated that the chances of Bitcoin reaching a seven-figure price by 2030 have increased due to the institutionalization of the asset class.
In conclusion, the path to significant investment from Sovereign Wealth Funds in Bitcoin hinges on regulatory clarity, institutional acceptance, and the integration of digital assets into the traditional financial ecosystem. As the industry continues to evolve and mature, these developments could pave the way for substantial inflows of capital into the cryptocurrency space.
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