Kevin O’Leary, in full Terence Thomas Kevin O’Leary, (born July 9, 1954, Montreal, Quebec, Canada), Canadian entrepreneur, financier, and television personality who was perhaps best known as a panelist on the reality series Dragons’ Den and Shark Tank. He is a founding investor and director of Stream Global, an international business outsourcing company. He is on the investment committee of Boston’s prestigious 200-year-old Hamilton Trust, and is the chairman of O’Leary Funds.
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Kevin O’Leary explains about the crypto regulations.
We’ve seen GBTC in the grayscale team. They’re trying to convert into an ETF and their most recent application was denied. So, within hours, they went ahead and filed a lawsuit against the second. Their argument is that the SEC has already approved both long and short UH futures-based ETFs. There are other spot bitcoin ETFs around the world, but we don’t have one here in the United States. I don’t know if you can comment or not, but what’s your general take on bitcoin spot ETF in the United States and maybe Grayscale’s chances to be the first to get that conversion?
Here’s how I look at it from the perspective of working in financial services and working within the system on a regulated basis, and I have for years believed suing the SEC is a really bad idea. It virtually never works. They have unlimited resources. It’s a bravado thing to do, and I’m sure others in the industry are applauding this, but the outcome is never good because they don’t like getting sued. They have tremendous powers to avoid being embarrassed and trying to embarrass the regulator into submission. That just doesn’t work, so this is not the path of least resistance.
I don’t want to comment on what they’re attempting to do other than to say, from my perspective, it’s a personal opinion, it borders on insanity, and it’s not a good playbook. I think if I were on that board, I would be pretty noisy in the boardroom about this now.
Having said all that, I’m more optimistic about other strategies in terms of getting some policy in crypto. We should talk about the next six months because you’ve got lots of evidence now of bipartisan interest in getting some policy in place, not in a combative way by suing regulators but in a way of cooperation on a bipartisan basis.
Let’s make it real easy. Okay, we’re not going to get everything regulated overnight. We may not get an ETF in the U.S. for two or three more years, but that’s not the only thing that matters. What I’d like to see, and a lot of others too, is take one asset, one asset, a really bipartisan asset in the form of a stable coin. All stable coins are not created equal. We know the meltdown and Luna. That story is well known and is algorithmic based. You know, stable coins may not be the best idea. It would be very hard to launch another one, but assets like USDC that are backed by the US dollar have not broken a buck recently, and if that was made and was allowed to be regulated, it could become the default payment service for the world backed by the US dollar because everybody would use it because so many commodities, including oil, are actually paid in US dollars. Imagine if you could use USDC to transfer between jurisdictions and geographies. It’s far more efficient, better ledger, more transparent, lower cost, and way faster.
What senator doesn’t like that idea? I think making the US dollar the king dollar and keeping it as the supreme default currency is a good idea. I don’t care what party you’re in, that’s a good idea. The policy being proposed by the Toomey and Hagerty bills and even contemplated in the limits bill, which has much more than just stablecoin, let’s just take stablecoin. If Tommey’s going to retire in January, he’s going to endorse this. If you could get it passed by the end of this year, it would be a fantastic thing and everybody in the crypto industry, including all the institutions that don’t own it yet, would see the very first marker of policy on a very basic asset stablecoin and contemplated in the policies very simple. Full audit every 30 days. What’s wrong with that?
It makes sense to me, and there are no assets held supporting the token or coin with a duration longer than 12 months. What’s wrong with that? That looks like a money market by Fidelity or by Schwab. I’ve been talking about this now for three months, and I’m really working hard going to Washington, trying to do whatever I can as a private citizen to push that agenda. Just one thing. Let’s get one thing done.
I will also note that since you and I last talked, Fidelity and Blackrock each put in $200 million. That’s a lot of money into a series of those circles. Now if that isn’t accommodating and supporting the notion of a regulated stable coin, I don’t know what isn’t. I mean that that is as good as it gets. Those are the most conservative financial institutions in the world, supporting the idea of a stable coin backed by the US dollar.
Talk to me about the disclosures you mentioned, obviously. There are a lot of people who have questions there. We’ve seen many other companies that have struggled over the last couple of months. But it feels like alongside this idea of more regulation is more requirements on the disclosure front. What do you see there? What do you think is the likely path that we’ll take?
There’s no question there’s going to have to be more disclosure. There’s going to have to be more transparency. But the truth is, and this is something the entire industry has to really get their heads around. If we can get some policy even though it will require additional compliance costs, more disclosure, more transparency, it opens the floodgates of institutional capital that has been waiting to come into the crypto market just in the payment system alone. Let’s say four or five different stable coins get licensed. It would be a phenomenal outcome because you would, for the first time, be able to get a one or two or three percent indexed allocation from sovereign funds running from $500 to $900 billion.
I serve the kind of guys that I serve in the indexing business. I’m not the only person doing it; there are lots of others, but we talk to these funds all the time and they say the same thing over and over again. Give me some policy, show me that I’m not violating the SEC, and I’ll give you a 1% allocation, sometimes a 3% allocation, for Bitcoin, Ethereum, and Solana, Polygon, stable coins. Just give me a regulated position, that’s all they want.
So for all of the angst and all the headaches and everybody worrying and gnashing their teeth and rubbing their hands together about disclosure, who cares? Let’s get this policy done. If you want, if you want to see bitcoin hit $100,000, that’s how you’re going to do it. You’re going to get the sovereign wealth funds to allocate to it. I’m a believer in that. That’s why I stay in these troubled and difficult times. I’m 100% compliant. Everything I touch is regulated. Whether I own an exchange in a country like Canada or am trying to buy a license in the UAE, I’m working with the regulator. I don’t want to be a crypto cowboy. It just shows you what happens when you’re a crypto cowboy. You get wiped out.
What are you most worried about over the next, let’s call it six to 12 months? What’s the thing that you’re like, man? People really have to pay attention to this, and I don’t think enough people are paying attention to whether it’s a risk or a potential surprise on the horizon.
People ask me every hour of the day if we are at the bottom, is it the time to buy, and we’re not, and the reason I say that is let’s just talk crypto markets. All the crypto markets. I don’t care what asset class you’re in within crypto markets; what coin, what token, what asset, what project, I don’t care, it doesn’t matter. We’re not at the bottom yet. What defines a good bottom is a panic event. We’ve had some good bankruptcies, but they’re all small. You know, yesterday’s announcement It’s irrelevant. It’s so small and so decentralized in the sense that the shareholders are all over the place. You took that kind of chance with leverage, and you got wiped out. That’s the whole point.
[This article is a transcription of a video made by Crypto Diary]
[Original video: https://youtu.be/yBhJNlJZXFY]