Kevin O’Leary became a pseudo-celebrity with his Shark Tank stint. His investment advice garners millions of views on YouTube. He had consistently been against the idea of investing in cryptocurrency, especially Bitcoin. Now with regulations coming up, he has changed his mind about blockchain technology. He appeared in the Bankless Podcast and shared some of his strategies for investing in crypto. He believes that despite the current crypto market crash, legislation on the crypto bill will drive organizations and funds to invest heavily in the industry, which would drive up the value of his investments.
As the Chairman of O’Shares O’Leary has become a vocal crypto bull, and recently visited members of Congress in Washington DC who are currently debating Senator Lummins’ crypto bill to lobby on the industry’s behalf.
OSC & SEC’s Legislation Over Crypto to Drive-Up Bitcoin Prices
Because of the lack of regulatory oversight in the cryptocurrency industry, crypto has traditionally been seen as a fringe aspect of the financial world. In a statement last year, Gary Gensler of the SEC called crypto the “wild west” of investing and said that crypto investors needed more protection. A crypto exchange attached to a dealer broker, a compliant platform, was issued a license by the OSC (Ontario Securities Commission).
“The company was moving forward with regulated policies, and I immediately invested because I saw it coming. I saw the writing on the wall”, O’Leary said. Other countries may adopt crypto regulations after Canada.
“I always ask these institutions and these sovereign funds, what allocation would you put into bitcoin? And they said, well, we can’t because our compliance department won’t allow it because the SEC hasn’t ruled on it yet,” O’Leary said. When regulations are adopted, the people he knows who run sovereign wealth funds and pension funds will “allocate 50 to 100 basis points” to crypto. Although that may not be a huge number, considering the funds O’Leary describes have billions, bitcoin would appreciate.
O’Leary’s Crypto Investments Diversified Into USDC, Polygon, WonderFi Exchange & More
O’Leary’s investment strategy revolves around two main concepts: diversifying your crypto investments, and focusing on companies building crypto infrastructure. According to O’Leary, he owns 32 positions, 32 chain projects, and 32 tokens. Diversification is about a few winning, not all. I don’t need them all to win. That’s what diversification is all about.”
Among the specific cryptocurrencies that O’Leary has invested in are bitcoin and Ethereum – where he spends most of his investment capital – as well as the altcoins Solana and Polygon. “I’ve made some investments in the infrastructure, you know, that old adage about the gold rush, you were better off owning and selling picks and shovels and jeans than you were trying to find gold.”
He’s an investor and paid spokesperson for FTX, the crypto exchange founded by wunderkind Sam Bankman-Fried. According to O’Leary, FTX is the first compliant institutional platform that his auditors have allowed him to use. And he’s invested in Circle, the company behind USDC. And he’s involved with WonderFi, a Canadian crypto-trading platform.
Stable Coins Like Tether May Face Liquidity Crisis Without Solvent Assets in 2023
O’Leary said after the American midterm elections, Congress will set cryptocurrency policy after the House is settled. In particular, O’Leary believes stablecoins should be the first sector of the crypto world that is regulated, and he has some ideas for how it should be done.
“It’s gonna look like this: 30-day audit on the assets underneath it. You can bring any kind of stablecoin you want, but there’s gonna be a 30-day audit. No assets supporting the token or coin with a duration more than 12 months. So if you’re gonna use T-bills, they gotta be short duration, probably average of six months duration, and that’s very much like a money market,” O’Leary said, specifically addressing the criticism that stablecoins — like Tether — lack solvent assets backing their stablecoin.
“I think what happens is you get a binary increase in the value of crypto, the minute people even sense policy, and that’s gonna happen sometime in January, February, and March. So I wanna be positioned before then,” O’Leary said. “It’s like being involved in the internet in its most early days,” O’Leary continued.