Founder of SkyBridge Capital Scaramucci: The craze for Crypto Assets reserve companies will eventually subside.

According to Bloomberg, Anthony Scaramucci, founder of the hedge fund SkyBridge Capital, believes that the recent trend of publicly listed companies mimicking the Crypto Assets treasury strategy is merely a short-term trend that will ultimately dissipate.

• "Follow-the-trend reserve model" is unsustainable: Scaramucci stated in an interview on Tuesday: "We are currently experiencing this concept of a 'replicative treasury company', you know, it will eventually fade away."
• Investors will question the "premium agency" logic: He further explains that investors will eventually question: why pay a premium for a company to hold assets that they could directly own? Essentially, investors will think about "why pay the middleman."

Imitation Wave Triggered by MicroStrategy

In the past year, the number of crypto treasury companies aiming to replicate the Michael Saylor model has surged. Saylor's software company transitioned into a Bitcoin proxy, and its strategy has captivated Wall Street this year.

• Latest Imitator: Bitcoin Miners Enter Ethereum Reserves: The latest trendsetter is Bitcoin mining company BitMine Immersion Technologies. The company announced this week a $250 million private placement to establish an Ethereum reserve (Ether treasury) and appointed well-known CNBC commentator and founder of financial research firm Fundstrat, Thomas Lee, as its chairman of the board.
• Celebrity endorsements as a differentiation strategy: These reserve companies commonly adopt the strategy of inviting well-known figures to join their advisory teams or boards in order to highlight their differences. For example:
• Eric Trump serves as a director of Metaplanet, which claims to be the "Japanese version of MicroStrategy."
• Joe Lubin, co-founder of Ethereum, serves as the chairman of Sharplink Gaming, which has transitioned from a gambling company to an Ethereum reserve entity.

The seller model is unique, but costs need to be examined

Scaramucci pointed out the uniqueness of the seller case: "The seller's situation is different; he is now operating multiple product lines." He emphasized: "I am not bearish on other companies because I am extremely optimistic about Bitcoin. But as an investor, you must examine the underlying costs behind each reserve company."

• The connection between SkyBridge Capital and Saylor: The First Trust SkyBridge Crypto Industry and Digital Economy ETF, which is provided with sub-advisory services by SkyBridge Capital, lists MicroStrategy as its top holding on its official website. Saylor also wrote the preface for the Bitcoin book published by Scaramucci this year.
• Intensifying Competition on Wall Street: Wall Street is continuously launching more encryption funds and diversified products, including Scaramucci's ETF, which compete with MicroStrategy and all emerging crypto reserve companies for investor attention. Nevertheless, MicroStrategy's performance this year still far exceeds that of the majority of dozens of crypto ETFs.
• MicroStrategy's Complex Financing Strategy: To support its Bitcoin buying binge that began in mid-2020, MicroStrategy's financing methods have evolved into a complex mix: from common stock and debt sales to convertible offerings, and most recently, into preferred share sales.

Doubts Arise: Controversy over "Premium Arbitrage"

This wave of crypto treasury mania has recently been criticized by renowned short-seller Jim Chanos, who called the model used by Saylor to assess the value of his crypto assets company "financial gibberish." Saylor rebutted Chanos's suggestion to short his company's stock and directly buy Bitcoin, arguing that there is a large premium on the company's common stock relative to its token holdings.

• Core Question of Scaramucci: Scaramucci points out a key issue: "The question is, if you give someone $10 and they put $8 of it into Bitcoin, will they do well? Yes. But you might have been better off just putting $10 into Bitcoin. I think that's a problem." This directly highlights the core controversy of the Crypto Assets company's premium arbitrage model: Are investors paying for unnecessary intermediaries?