Anthony Scaramucci, founder of investment firm SkyBridge Capital, defended bitcoin's decline and said he advises investors to hold some amount of it as it's the only cryptocurrency that's achieved "escape velocity."
Although other digital currencies have been gaining in popularity, bitcoin has managed to "maintain its supremacy as the apex predator in digital currency," he said in a Bloomberg interview.
Bitcoin was last trading 7% lower on the day at around $45,700. It hit an all-time high near $65,000 in mid-April, but has lost momentum since and is now only up 57% so far this year. The digital asset was hit hard last week after Elon Musk cited climate-related concerns over its mining process and suspended bitcoin payments for Tesla.
Scaramucci, known for his infamously short stint as White House Director of Communications in the early days of Donald Trump's presidency, has backed bitcoin for being a potential store of value compared to the US dollar. He says it would be responsible for him to advise clients to hold between 1-3% of the cryptocurrency in their portfolios.
"I'm not telling them you've got to own 100% of your net worth in it — but if we're right, you don't want to be missing out on this," he told Bloomberg.
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Ethereum's ether, which is trading around $3,480, is also in the process of achieving escape velocity now that major changes are coming to its blockchain, he said.
Escape velocity — a term usually used in physics — suggests that if there is a 20% chance that bitcoin hits $400,000 and an 80% chance that it goes to zero, it is still underpriced at any price below $80,000.
Dogecoin was trading 3% lower at 50 cents on Monday. Musk has been actively supporting the meme-inspired cryptocurrency, while criticizing bitcoin.
Scaramucci said dogecoin, which is now the fifth-largest cryptocurrency by market capitalization, may just be the silver to bitcoin's gold. "This is happening. This is upon us right now — you either get it or you don't get it," he said. Typically, silver is a lot more volatile than gold, but tends to respond to similar market catalysts.