In a chaotic crypto environment where expectations of a ‘crypto winter’ have gone mainstream, investors are on edge about where the industry goes from here. While the near term outlook appears muddled, Shark Tank investor Kevin O’Leary believes the industry will come out stronger than ever once the proper regulatory framework is put in place. The recent collapse of FTX has forced regulators to act.
In his latest conversation with TDR contributor Anthony Varrell and Scott Braun, Kevin chooses to take a pragmatic view of current events. As one of the more vocal proponents of federal regulation for the crypto space, Kevin believes regulation is the trigger event to foster greater retail and institutional participation. While displacing bad actors that brought the industry to the brink is an added bonus:
I’m putting on positions (in crypto) before year-end again. I think getting more noise about regulation is actually going to bolster crypto… We have to change what we’re doing. That’s the silver lining in this thing. We’ve scrapped this idiot management out of it. And now, we get some regulation and let this sector become what it can be.Kevin O’Leary
While acknowledging his busted bet in FTX was a bad investment, Kevin recounts how limiting exposure to any one individual name and sector helped limit losses and capital intact as he searches for his next investments in a post-regulatory landscape. In fact, Kevin reports that deal flow is better than ever, although private equity valuations are 60-80% lower across the board.
Regarding the specifics of what Kevin is investing in right now, he prefers “regulated exchanges tied to broker-dealers” because of the “merit and value” that these businesses should reflect over time.
Mr. Wonderful currently has a big position in Canadian-based Wonderfi Technologies, which officially closed its deal to purchase BitBuy—a leading cryptocurrency platform and first approved crypto marketplace in Canada—in March. At the time, Kevin commented that the merger would provide “an institutional grade compliant crypto platform to investors interested in exposure to centralized and decentralized financial services.”
The establishment of a federal crypto regulatory framework should serve to bolster investor confidence and attract investors back to exchanges such as BitBuy, where Mr. O’Leary is boosting exposure.
Far from just commentating on the need for more regulation, Kevin O’Leary has taken his message to Capitol Hill.
On Wednesday, the former FTX spokesperson evangelized about the potential of cryptocurrencies during testimony before Congress – and touted a sympathetic theory on FTX’s collapse backed by its recently arrested founder Sam Bankman-Fried.
Kevin also described Binance, the world’s largest crypto exchange, as a “massive, unregulated monopoly now.”
Click on the embedded link for more of recent interview with Shark Tank investor, Kevin O’Leary.