Shark Tank star Kevin O’Leary once called bitcoin ‘garbage’, but said the cryptocurrency now makes up 3% of his portfolio

kevin o'leary
  • Shark Tank investor Kevin O’Leary said he has allocated 3% of his portfolio to bitcoin, which he once considered “garbage”.
  • O’Leary said in an interview with Yahoo Finance he’s working on organizing a “council of sustainability” to include corporations and governments that are mining bitcoin responsibly.
  • O’Leary bought bitcoin as Canada and other countries have eased restrictions on institutional buying of the cryptocurrency.
  • See more stories on Insider’s business page.

“Shark Tank” investor Kevin O’Leary has allocated 3% of his portfolio to bitcoin and is aiming to bolster sustainability in mining for the world’s largest cryptocurrency.

O’Leary told Yahoo Finance Live in an interview that aired Wednesday that he made the allocation after Canada, where he’s from, and other countries eased restrictions on institutional purchases of bitcoin. Regulators in Canada so far this year have approved the launch of four cryptocurrency exchange-traded funds.

The chairman of O’Shares ETFs, who called bitcoin “garbage” in a May 2019 interview on CNBC, said in March that he would be adding bitcoin to his portfolio partly because he thought of it as a hedge against inflation. He told Yahoo Finance Live that after his announcement he received numerous calls from institutional investors asking if he knew where the coins originated. He warned that “there’s a big problem brewing” in the crypto industry how and where coins are mined.

He said he’s working to make sure every coin he owns is compliant.

“I know the provenance of where my wallet coins were mined now, and that means I’ve had to take equity positions in miners. I’ve had to start investing in them with the covenants in place that I would like to be paid back in a royalty of a clean coin,” O’Leary said.

He also said he’s working on organizing a “council of sustainability” to include corporations and governments that are mining coins responsibly.

Bitcoin is a target of criticism in part because its digital mining process requires a significant amount of energy. Research from Cambridge University shows it uses more energy each year than Sweden and Argentina.

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‘Shark Tank’ investor Kevin O’Leary trumpeted GameStop, slammed celebrity SPACs, and warned of a painful market correction in a recent interview. Here are the 18 best quotes.

kevin o'leary
Kevin O’Leary.

  • Kevin O’Leary touted GameStop, Robinhood, and NFTs in an interview this week.
  • The “Shark Tank” investor warned about airlines, leverage, and celebrity SPACs.
  • O’Leary also blasted prospective tax hikes and took aim at China.
  • See more stories on Insider’s business page.

“Shark Tank” investor Kevin O’Leary suggested GameStop could execute a Netflix-style comeback, predicted several US airlines will go bankrupt over the next two years, and warned of a brutal market correction in an interview this week.

The O’Leary Funds and O’Leary Ventures boss – whose nickname is Mr. Wonderful – also slammed celebrity SPACs, praised Robinhood, and trumpeted NFTs during the conversation with influencer Kevin Paffrath on his YouTube channel, Meet Kevin.

O’Leary also criticized the Biden administration’s plan to hike corporate taxes, and called for the US to take a tougher stance towards China.

Here are O’Leary’s best quotes from the interview, lightly edited and condensed for clarity:

1. “I’m waiting. So far there’s been no correction, but I’ve lived through lots of volatility and I know, just when it seems to be safe, poo poo happens.” – discussing the prospect of a market crash.

2. “GameStop’s brand has way more value today than it had five months ago, before it became part of every headline around the world, day after day. Netflix saw the writing on the wall when they were mailing DVDs to everybody and said, ‘We’re going to digitize this,’ and they had a brand. Maybe GameStop can do the same thing.”

3. “If I was short GameStop stock right now, I’d be worried. I think it’s going to get a second kick at life. This whole social constituency supporting it – the pricing of the stock is kind of irrelevant at this point.”

4. “It’s hilarious if you look at the volatility of Amazon over the last 20 years. You would have never owned it as it’s so volatile, but in the long run it’s created a trillion dollars’ worth of value for shareholders. Same thing is going to happen to these stocks that are going to provide digitization.” – underscoring the growth prospects of Zoom, Shopify, and other stocks that enable remote activities.

5. “It’s not good news for the airlines because even though they’re coming back, it’s all basically vacation tickets. Everybody’s going to Disneyland in a big tube. That’s a very crappy business, they won’t make any money. Over the next two years, probably a couple of them have to go bankrupt.” – underscoring the challenges for airlines if business travel permanently falls by 15% or 20%.

6. “Frankly I’m not a big fan of SPACs. I do have about 20 SPACs in my portfolio right now, but only from operators that I know. A SPAC is no different than private equity, and so I need to know the team that’s backing the SPAC has done deals before, knows how to buy at the right multiple, and knows how to operate. I’m against the idea that some celebrity knows what they’re doing in private equity, it’s a joke. I avoid those like the plague, I think those are going to go to zero.”

7. “I’m a big fan of Robinhood because even though it’s got a lot of criticism, it helps 22 million people learn about stocks. I’m a big believer in learning the ways of the stock market.”

8. “When you get into these complex straddles and collars and all of this stuff with leverage, sometimes you wake up with a hangover after going out to a party, and you forget the position you have on and you just blow yourself up. You’ve got to be careful.”

9. “I’m beyond sanctions, I want to take them right out of the financial system in North America.” – calling for the US to adopt a tougher stance towards China in order to level the playing field.

10. “Elon Musk is a maverick who doesn’t play by the rules, but he’s actually a good example of how this relationship should work. If American companies want to go to China, they shouldn’t have to give up control of their intellectual property to do that.”

11. “If you believe that burning up huge amounts of coal is detrimental and I do, you should stop buying bitcoin from the Chinese. Over time, as institutions start to really get involved in crypto, you’ll have the discounted blood coin from China and you’ll have the premium virgin coin with provenance – no different than blood diamonds.”

12. “NFTs are a derivative of the digital economy. There’s merit, but as a new asset class it’s going to be immensely volatile. The idea that you have something that’s copyrighted in perpetuity and can’t be forged is really interesting and a good idea. At the end of the day they will find their place.”

13. “You’re pouring free money out of the sky from a helicopter into anywhere you can stuff it. But then you’re raising taxes so you’re taking it back right away, before it has a chance to have any effect whatsoever. You can’t suck and blow at the same time, it doesn’t make any sense.” – criticizing the Biden administration’s plan to follow up its stimulus efforts by raising corporate taxes.

14. “The idea that Yellen can run around the world asking for a standard minimum corporate tax is a joke that’s never going to happen.”

15. “I covet downside protection much more than outperformance. I don’t care about beating the indexes at all. I don’t need more money, I need to keep what I’ve got.”

16. “Buying the dip is more rock and roll, but what invariably happens is you go through a massive correction and you learn a very important lesson. The generation that is trading right now has never gone through a sustained correction. It’s coming – I don’t know when, I don’t know what’ll trigger it, but they will learn their lesson. If you have a lot of leverage on, it’s a hell of a lesson because you end up in a negative net-worth position. But you do learn from it.”

17. “Take 10% of your paycheck, put it away, and do not touch it except in emergencies. When you take money and burn it on a vacation, or buy some useless piece of crap you’re never going to use – which many people are guilty of including me – you’ve killed off your future. That money’s not working for you anymore. Do you really need another pair of jeans, another pair of shoes? Just look at your closet of all the crap you don’t wear, that’s all money you wasted.”

18. “If you walk around with an Apple Watch on, that thing is a piece of consumer-electronic junk. I own Apple stock, but I would never be seen dead with an Apple Watch. Not a chance in hell.” – voicing his preference for wearing traditional watches and supporting conventional watchmakers.

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‘Shark Tank’ star Kevin O’Leary says GameStop could stage a Netflix-style comeback – and short-sellers should be worried

Kevin O'Leary
Kevin O’Leary.

  • GameStop can capitalize on its current fame to revamp its business, Kevin O’Leary says.
  • The “Shark Tank” investor suggested the retailer could execute a Netflix-style pivot.
  • O’Leary also warned against shorting the stock given its passionate following.
  • See more stories on Insider’s business page.

GameStop could leverage the hype around its stock to transform its business and stage a comeback, “Shark Tank” star Kevin O’Leary said in an interview this week.

The video-games retailer’s brand “has way more value today than it had five months ago, before it became part of every headline around the world, day after day,” O’Leary told Kevin Paffrath on the influencer’s YouTube channel, Meet Kevin.

The O’Leary Funds and O’Leary Ventures boss – whose nickname is “Mr. Wonderful” – attributed GameStop’s newfound fame to the Reddit and Robinhood users who executed a short squeeze on the stock. They helped boost the company’s stock price from about $17 to an intraday high of $483 in January.

O’Leary pointed to Netflix, which pivoted from physical disks to online streaming in 2007, as an example of a company that successfully made the shift to digital.

“Netflix saw the writing on the wall when they were mailing DVDs to everybody and said, ‘We’re gonna digitize this,’ and they had a brand,” O’Leary said. “Maybe GameStop can do the same thing,” he continued, suggesting the company could offer new services to gamers, or host classes and other gatherings in its stores across the US.

“I think it’s going to get a second kick at life,” he added.

O’Leary also warned investors not to bet against GameStop and its army of individual shareholders.

“If I was short that stock right now, I’d be worried,” he said. “With this whole social constituency supporting it, the pricing of the stock is kind of irrelevant at this point.”

Chewy cofounder Ryan Cohen, one of GameStop’s biggest shareholders and possibly its next chairman, clearly agrees with O’Leary that the company can deliver a second act.

The activist investor has overhauled the company’s board, wants to revamp its strategy to focus more on e-commerce, and likely spurred its recent decision to raise up to $1 billion by issuing new stock.

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Bitcoin has surged to a record $60,000 as stimulus hopes and big-name backers fuel demand

traders happy celebrate fist pound
The surge marked a 1,000% gain in the past year.

  • Bitcoin hit a record $60,000 on Saturday, marking a 1,000% gain in the past year.
  • The cryptocurrency has benefited from institutional support and fiscal stimulus.
  • Mark Cuban and Kevin O’Leary are fans, Warren Buffett and Michael Burry aren’t.
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Bitcoin surged as high as $60,000 for the first time on Saturday, lifting its price increase over the past year to more than 1,000%.

The cryptocurrency, which boasts a market capitalization of more than $1.1 trillion, has been buoyed by investor optimism. President Joe Biden signed a $1.9 trillion pandemic-relief bill into law on Friday, which will lead to $1,400 stimulus checks being distributed to millions of Americans, fueling hopes that the market boom will continue.

Bitcoin has also benefited from major institutional endorsements this year. Elon Musk’s Tesla plowed $1.5 billion into the cryptocurrency, Mastercard said it would allow merchants to accept select cryptocurrencies, and BlackRock has started to “dabble” with it as clients clamor for bigger returns.

“Shark Tank” billionaire Mark Cuban said this week that money is flowing into crypto because rock-bottom interest rates have reduced the appeal of bonds and other assets. People are also bored at home during the pandemic and see owning crypto as a source of entertainment, he continued.

Cuban argued bitcoin’s utility has increased massively with the rise of decentralized finance (DeFi) platforms. However, he dismissed the idea that it could serve as a currency or hedge against inflation.

One of Cuban’s “Shark Tank” costars, Kevin O’Leary, has warmed up to bitcoin after previously calling it “garbage.” He cited inflation risks and the advent of bitcoin ETFs as reasons for his change of heart, and plans to give the digital coin a 3% allocation in his portfolio.

However, other high-profile investors remain deeply skeptical of bitcoin. Warren Buffett has blasted it as “rat poison squared” and a worthless delusion. He warned that cryptocurrencies would come to a bad end.

Buffett’s business partner, Charlie Munger, recently said it was too volatile to serve as a medium of exchange, and advised others to follow his lead and not buy it.

Michael Burry, the investor who anticipated the collapse of the US housing market in the mid-2000s and made a fortune betting on that outcome, has warned bitcoin is a “speculative bubble” and predicted a “dramatic and painful fall.”

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Bitcoin is irrelevant to financial markets and investors ‘are going to weep’ if regulators come down hard on crypto, says Kevin O’Leary

kevin o'leary
  • Kevin O’Leary told CNBC on Thursday bitcoin is irrelevant to financial markets and at risk of regulation. 
  • His comments come as an increasing number of institutions like Guggenheim and SkyBridge capital invest millions into the cryptocurrency, driving a rally of over 200% in 2020. 
  • “I’m waiting for the day that one of these regulators comes down hard on bitcoin. Grown men are going to weep when that happens. You’ll never see a loss of capital like that ever in your life. It will be brutal,” he said. 
  • Treasury Secretary Steven Mnuchin is proposing new regulation that would require certain cryptocurrency traders to provide more information about their identities and cryptocurrency transactions.
  • View Business Insider’s homepage for more stories.

Kevin O’Leary told CNBC on Thursday that bitcoin is irrelevant to financial markets and too at risk of regulations to be taken seriously by institutional investors.

“Is this a nothing burger? It’s not even a single cell amoeba,” the O’Shares chairman said,
“I love to talk about it, it’s fun to watch it go up and down, but during the day, when the bell rings, I don’t talk to anybody that’s worried about this. They do not put capital to work in bitcoin.”

His comments come as more institutional players are piling in, validating bitcoin’s legitimacy as a store of value and hedge against inflation. Earlier this week, SkyBridge Capital invested $25 million into a new bitcoin fund, while last month, Guggenheim filed to reserve the right for 10% of its $5.3 billion Macro Opportunities Fund to invest in the Grayscale Bitcoin Trust.

Read more: Renowned strategist Tom Lee says to buy these 29 stocks that were ravaged by the pandemic but now poised to boom as the world reopens – and they’re all top-rated by 3 different investing strategies

O’Leary said that the concept of a digital currency will likely come to fruition in the future, but investors should be careful glorifying bitcoin while it has yet to fulfill a defined role in financial markets and while it could still be regulated. This year, bitcoin has skyrocketed over 200%, and many crypto bulls are forecasting an explosion of growth in 2021. 

Though regulations could be coming for the popular token. Treasury Secretary Steven Mnuchin is proposing new rules that would require certain cryptocurrency traders to provide more information about their identities and cryptocurrency transactions. This doesn’t appear to have scared off various institutional investors, but O’Leary, who said he has $52.77 in a crypto wallet, is more worried.

“I’m waiting for the day that one of these regulators comes down hard on bitcoin. Grown men are going to weep when that happens. You’ll never see a loss of capital like that ever in your life. It will be brutal,” he said. 

O’Leary added: “This whole market, even if Bitcoin were to go up, another 2000% is completely irrelevant to the institutional client.”

Read more: ‘I don’t see this ending well’: A 47-year market vet breaks down why stocks are a ‘few months’ away from a 75% crash – and says gold will surge to $10,000 because of a tidal wave of inflation

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