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Mutual Fund Legend
November 11, 2020
Bitcoin is an emerging asset class that has been de-risked over the last three years with attractive supply/demand dynamics.
Bitcoin is digital gold. It is better at being gold than gold.
Increasing retail and institutional adoption across the globe produces value via the network effect.
Near zero interest rates and unprecedented money printing represent an existential risk to the 60/40 portfolio and place a premium on scarce assets like gold, real estate, art and Bitcoin.
Major financial institutions and investors are increasingly bullish on Bitcoin
J.P.Morgan, December 2020
BlackRock, November 2020
Alliance Bernstein, November 2020
Morgan Stanley, December 2020
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Bitcoin’s supply is fixed at 21 million. Presently there are approximately 18.5 million in circulation, or 88.5% of the total. The remaining 2.5 million will be mined over the next one hundred and twenty years according to a known and unchangeable schedule.
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Gold is a scarce commodity with an elastic supply. The supply of gold increased by a factor of ten over the last century.
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Bitcoin is the first store of value in the world where supply is entirely unaffected by increased demand. Thus, increases in demand have a pronounced impact on the price of Bitcoin.
Gold Supply1 (1835-2020)
Bitcoin Supply (2009-2060)
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The total market capitalization for gold is $10 trillion vs $500 billion for Bitcoin
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If Bitcoin achieves the same market capitalization of gold, the price per Bitcoin will be $535,000
“The acceptance of Bitcoin as a digital asset, a quasi-gold, has been accelerated by the pandemic”
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Bitcoin has gone from a white paper in 2008 to the dominant digital asset with a market capitalization of over $500 billion
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Bitcoin’s growth and adoption rate has been significantly faster than mobile phones, the Internet, and “virtual banking” (i.e. PayPal)
Adoption Curves1
S-Curve Analysis of Potential Adoption2
0% owned Bitcoin
10% of Americans own Bitcoin
90% projected to own Bitcoin
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Unprecedented levels of fiscal and monetary stimulus have been unleashed globally in response to the Covid-19 pandemic
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The Federal Reserve has flooded the markets with dollars. 35% of all U.S. dollars in existence have been printed since March 2020.
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U.S. federal government is running a deficit of approximately 25% of GDP, by far the largest deficit since World War II.
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Massive money printing inflates asset values, particularly limited supply assets like art, real estate, gold, and Bitcoin.
M2 MONEY STOCK1
FEDERAL DEBT2
Total Public Debt As Percent Of Gross Domestic Product
Chairman of the Federal Reserve
September 15, 2020
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The global supply of bonds with negative yields exceeds $18 trillion: 20% of the world’s investment grade debt is sub-zero
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Negative interest rates present substantial challenges for individual investors, particularly people in retirement or approaching retirement
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Negative interest rates represent an existential risk to pension funds, insurance companies, and endowments that need to achieve targeted rates of return to meet financial obligations
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A small re-allocation of capital from the $128 trillion fixed income market to Bitcoin, a $500 billion market, would produce a substantial increase in the price of Bitcoin
SUPPLY
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Bitcoin mining generates 900 new Bitcoin daily (or 27,000 monthly and 82,800 quarterly)
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Bitcoin miners are natural sellers as they have substantial operating expenses, particularly energy costs, to pay
“MassMutual’s Bitcoin purchases represent another milestone in the Bitcoin adoption by institutional investors. One can see the potential demand that could arise over the coming years as other insurance companies and pension funds follow MassMutual’s example.”
DEMAND
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Square is buying over $300 million Bitcoin monthly on behalf of its users
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Grayscale bought over $1 billion Bitcoin in the month of November 2020
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PayPal acquired over $600 million Bitcoin in the four weeks following the roll-out of Bitcoin trading services on November 10, 2020
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MicroStrategy (MSTR: Nasdaq) and its CEO, Michael Saylor, acquired $1.3 billion Bitcoin between August and December 2020
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Mass Mutual Life Insurance acquired $100 million Bitcoin in December 2020
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Ruffer Investment Company, a U.K. asset manager, acquired $744 million Bitcoin, or 2.7% of assets under management, in December 2020
“Yes, Bitcoin is hard to buy. But, there is a truism in life… anything that is slightly hard to do usually has better rewards.”
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The Fund is 100% invested in Bitcoin at all times
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The Fund is designed for buy and hold investors to capitalize on the adoption of Bitcoin which SkyBridge believes will be the best performing asset class of the next five and ten years
SkyBridge, an SEC registered investment advisor with over $7 billion assets under management and advisement
Bitcoin is held in custody at Fidelity Digital Assets, a division of Fidelity Investments
Ernst & Young
Fund is administered by M.G. Stover, the leading administrator in the crypto-currency sector
U.S. dollars are held in custody at Silvergate Bank (NYSE: SI), the leading bank in the cryptocurrency sector
SkyBridge and affiliates invested $25.3 million in the fund for its December 22, 2020 launch
A coordinated state attack on Bitcoin
A bug in Bitcoin’s Core software could undermine confidence
Miners could hypothetically collude and manipulate network transactions
Bitcoin could remain a niche asset class and not achieve mainstream adoption
