Shark Tank star Kevin O’Leary, also known as Mr. Wonderful, has warned about regulators coming down hard on bitcoin. In addition, he says that “even if bitcoin were to go up another 2,000%, it’s completely irrelevant to institutional clients.”
Kevin O’Leary Warns of Brutal Bitcoin Regulation, Says Bitcoin Is Not an Institutional Product
Canadian investor and television personality Kevin O’Leary talked about bitcoin in an interview on Thursday with CNBC’s Squawk Box.
O’Leary was asked whether he had changed his mind about bitcoin from thinking that it was “not a real currency” to investing in it and possibly buying more. “Let me be clear … I’ve been a cryptonian for years,” the Shark Tank star replied.
Whipping out his phone, he said, “here is my bitcoin wallet. At the time, all you can get was ethereum, XRP, bitcoin, litecoin, stellar lumen, and bitcoin [cash]. I bought this at the last craze. I put $100 to work here. This morning it is worth $52.77 because not all cryptocurrencies are the same, clearly.” He elaborated:
I’m involved in this because it’s fun but this is not an institutional product … This whole market, even if bitcoin were to go up another 2,000%, is completely irrelevant to the institutional clients.
Reiterating that he owns bitcoin, O’Leary noted, “I ride with it on the weekends,” but emphasized that “you can’t put this into a fiduciary product … it’s irrelevant to financial markets.”
He clarified that “The real problem is if you get involved in this as a fiduciary, and it gets regulated, and it gets cut in half or goes to zero, who knows what, you have never seen the mother of class action lawsuits that’s coming from that one.”
O’Leary was asked to comment on how the Dallas Mavericks, the professional basketball team owned by his fellow Shark Tank star Mark Cuban, recently began to offer merchandise discounts to customers paying with bitcoin. “That’s another arena … where you can see legitimacy to bitcoin from people like Mark Cuban, your buddy, who’s trying to make this into a more relevant part of people’s lives,” said the CNBC host. Cuban also recently said bitcoin was more of a religion than a solution to anything.
“I know Mark quite well, he also was quoted saying he thinks bananas are bigger common currency and he is probably right,” O’Leary said, adding:
My whole point is for all of us … who monitor and work within the financial services’ multi trillion dollar global industry, is this a nothing burger? It’s not even a single cell amoeba.
The Shark Tank investor proceeded to detail that “The financial markets deal with regulators, and you can only operate within the confines of those rules, and so when we glorify something like this [bitcoin], it really has nothing to do with the financial markets that make the whole world work. And no institutional sovereign fund investors I’ve ever talked to has said to me go index all of the cryptocurrencies for me.”
Asserting that the institutional investors he talked to do not want to own bitcoin because “they fear the regulator,” O’Leary warned:
Watch what happens one day and I’m waiting for this one. I’m waiting for the day that one of these regulators come down hard on bitcoin. Grown men are going to weep when that happens. You will never see a loss of capital like that ever in your life. It will be brutal. And, I’m just saying you have to get ready for it.
Meanwhile, a growing number of institutional investors are investing in bitcoin. Bitgo recently said that it is seeing “unprecedented institutional interest” and Skybridge Capital has launched a bitcoin fund, expecting an “avalanche of institutional investors.” More banks have also started offering crypto services to institutional clients, such as Standard Chartered Bank. In terms of regulation, the Financial Crimes Enforcement Network (FinCEN) recently proposed new rules affecting cryptocurrency wallets.
<Source: Bitcoin News>