Michael Burry, Jeremy Grantham, and other top investors are predicting an epic market crash. Here are their gravest warnings so far.

Michael Burry against a promotional backdrop for the movie "The Big Short."
Michael Burry.

  • Michael Burry, Jeremy Grantham, and other experts are predicting an epic market crash.
  • Jeffrey Gundlach, Leon Cooperman, and Stanley Druckenmiller expect a downturn too.
  • Here are the gravest warnings so far from eight top investors and commentators.
  • See more stories on Insider’s business page.

Michael Burry and Jeremy Grantham are bracing for a devastating crash across financial markets. They’re far from the only experts to warn that rampant speculation fueled by government stimulus programs can’t shore up asset prices forever.

The billionaire investors Leon Cooperman, Stanley Druckenmiller, and Jeffrey Gundlach have also sounded the alarm. The same is true for the “Shark Tank” star Kevin O’Leary, the market prophet Gary Shilling, and the “Rich Dad Poor Dad” author Robert Kiyosaki.

Here are the most striking warnings from these 8 market experts:

Michael Burry

Michael Burry against a gray promotional backdrop for the movie "The Big Short."
Michael Burry.

Burry in June described the markets as the “greatest speculative bubble of all time in all things” and said retail investors were buying into the hype around meme stocks and cryptocurrencies before the “mother of all crashes.”

Earlier this year, the investor of “The Big Short” fame, who runs Scion Asset Management, pointed to Tesla, GameStop, bitcoin, dogecoin, Robinhood, and the red-hot US housing market as signs of speculative excess.

Read more: Goldman Sachs says buy these 20 stocks that have the most upside potential right now — including 5 set to surge by at least 50%

Jeremy Grantham

Jeremy Grantham against a blurry background.
Jeremy Grantham.

Grantham in January said the market was a “fully fledged epic bubble” and described it as the “real McCoy.”

“When you have reached this level of obvious super-enthusiasm, the bubble has always, without exception, broken in the next few months, not a few years,” the legendary investor and GMO cofounder said.

“We will have to live, potentially, possibly, with the biggest loss of perceived value from assets that we have ever seen,” Grantham added.

Leon Cooperman

Leon Cooperman holding his glasses up to his right temple.
Leon Cooperman.

Cooperman expressed deep concerns about financial markets in May.

“Everything I look at would suggest caution, intermediate to long term, would be the rule of the day,” the billionaire investor and Omega Advisors boss said. “When this market has a reason to go down, it’s going to go down so fast your head’s going to spin.”

But Cooperman described himself as a “fully invested bear” because factors that typically cause bear markets — rising inflation, recession fears, a hostile Federal Reserve — weren’t present.

Read more: How to mine doge: An 18-year-old TikTok influencer shares his process for earning crypto without directly buying via a $700 rig — and explains how it works for other altcoins including litecoin

Stanley Druckenmiller

Stanley Druckenmiller speaking and gesturing against a black-and-orange background.
Stanley Druckenmiller.

Druckenmiller said in May that the bull market reminded him of the dot-com boom, but he cautioned that asset prices could continue rising for a while.

“I have no doubt that we are in a raging mania in all assets,” the billionaire investor and Duquesne Family Office chief said. “I also have no doubt that I don’t have a clue when that’s going to end.

“I knew we were in a raging mania in ’99, but it kept going on, and if you had shorted the tech stocks in mid-’99, you were out of business by the end of the year,” Druckenmiller added.

The investor indicated he would pull his cash out of equities in a matter of months.

“I will be surprised if we’re not out of the stock market by the end of the year, just because the bubbles can’t last that long,” he said.

Jeffrey Gundlach

Jeff Gundlach speaking against a black background.
Jeffrey Gundlach.

Equities are undeniably expensive, Gundlach said in March.

The billionaire investor and DoubleLine Capital boss said that claiming the stock market was “anything other than very overvalued versus history” was “just to be ignorant of all the metrics of valuation.” He predicted that stocks would fall by upwards of 15% when the downturn comes.

Gundlach, known as the “bond king,” predicted that the retail investors who had piled into meme stocks and other speculative assets wouldn’t stick around once prices started dropping.

“We’ll have a tremendous unwind of a lot of the money that thinks that the stock market is a one-way thing,” he said.

Read more: Famed investor Michael Burry is predicting the ‘mother of all crashes’. Here’s what 9 other key ‘Big Short’ players are doing now.

Kevin O’Leary

Kevin O'Leary speaking and pointing on "Shark Tank."
Kevin O’Leary.

O’Leary said in April that stocks would eventually crumble, but he framed the downturn as an educational opportunity for rookie investors.

“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 “Shark Tank” star and O’Leary Funds chief said.

“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,” he continued.

“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,” O’Leary added. “But you do learn from it.”

Robert Kiyosaki

Robert Kiyosaki against a green background.
Robert Kiyosaki.

Kiyosaki tweeted in June that he was expecting the greatest market crash ever.

“Biggest bubble in world history getting bigger,” the personal-finance guru and author of “Rich Dad Poor Dad” said. “Biggest crash in world history coming.”

Kiyosaki has accused the Federal Reserve of overstimulating markets and devaluing the dollar. He’s advised investors to prepare for the downturn by stocking up on precious metals and cryptocurrencies.

“ARE YOU READY?” he tweeted in April. “Boom, Bust, Mania, Crash, Depression. Mania in markets today. Prepare for biggest crash, depression in world history. What will Fed do? Print more money? Save more gold, silver, bitcoin.”

Gary Shilling

Gary Shilling against a yellow-and-orange background.
Gary Shilling.

Shilling predicted in April that financial markets would nosedive, but he declined to hazard a guess at when the crash would arrive.

“I’m not making any firm prediction as to when this thing is going to collapse,” the veteran forecaster and president of A. Gary Shilling & Co. said.

“Speculations outrun any logic and that’s probably going to be true of this one,” Shilling continued. “But at some point, boy, there’s going to be a lot of blood on the floor.”

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‘Shark Tank’ star Kevin O’Leary shrugged off government crypto bans and revealed he’ll keep buying the bitcoin dip in an interview. Here are 10 highlights.

kevin o'leary
“Shark Tank” investor, Kevin O’Leary

  • Kevin O’Leary explained why governments won’t be able to put a lid on cryptocurrencies in a recent interview.
  • The “Shark Tank” star spoke about the tipping-point for institutions getting into bitcoin and his involvement in making it ESG-compliant.
  • He shared what would prompt him to bump up his bitcoin allocation to 5%, and outlined what it would take to get a yield off his holding.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

Famed investor Kevin O’Leary called bitcoin the “granddaddy” of digital assets and explained why he thinks governments will be unable to ban cryptocurrencies, speaking in a “Bitcoin Magazine” podcast with hosts David Zell and Matt Odell on Tuesday.

The “Shark Tank” co-host, who is a major shareholder in a new DeFi investing company, also spoke about bitcoin’s move to becoming ESG-friendly and what the tipping point for institutional adoption will be – and how that could help its price eventually skyrocket.

Here are 10 highlights from O’Leary’s interview, lightly edited and condensed for clarity:

1. “I’m never going to sell it, I’m not going to trade it. I’m going to own it, and I anticipate it will appreciate over time and probably beat the S&P 500 index.” – on considering bitcoin as property, not currency.

2. “I’m not going to try and trade in and out of price adjustments. I’m going to allocate 3% – and if the price drops, I’ll buy more. That’s the whole point.” – on bitcoin’s volatility being problematic for institutional investors.

3. “The institutional investor is not on board yet. But my thesis is: when we resolve the issues around bitcoin right now in the next couple of years, and allocation starts happening from sovereign funds and pension plans, you’re gonna see a material appreciation in price.” – on value appreciation over time.

4. “The most desirable asset in crypto is bitcoin – it is the gold standard of crypto.” – on institutions considering allocations to cryptocurrencies.

5. “I don’t see a situation where it’s going to be made illegal anywhere, and the thesis is the genie’s out of the bottle. Bitcoin is distributed all around the world and used as property, and currency, in every country on Earth. And so, I don’t really see, even if one country says they’re going to make it illegal, how they’re exactly going to do that.” – on bitcoin being regulated by governments.

6. “Regulating it out of existence is a low probability as far as I’m concerned. Not going to happen. In fact, it’s going the other way.” – on regulators having to deal with bitcoin’s use.

7. “The world is going to move towards digital currency. Bitcoin was the beginning of that, it is the granddaddy of it all, which is why it’s so desirable.” – on the inevitability of digital currencies being the future.

8. “I have had many discussions with some of the larger players in bitcoin in terms of ownership and assets. And the reason we have a collective interest in it is that we see the logjam being broken up, and then institutions coming into an asset class we already are positioned it – that’s a very attractive outcome.” – on being involved in bitcoin’s move to becoming ESG-friendly.

9. “I’m looking at increasing my allocation. Next stop will be 5% on bitcoin (from 3%) and at the same time investing in infrastructure so that I can actually do the same thing that anybody else wants to. I would like to actually make yield off my coin, and that involves getting a platform that allows me to do that easily, compliantly with tax reporting.” – on his investment in institutional tax-compliant platforms for bitcoin that are just starting up.

10. “Bitcoin is volatile. There’s no question about it. But I think everyday we move towards more adoption at the institutional level. But there’s going to be the proverbial tipping point when all of a sudden one or two or three large institutions do an allocation, and you’re going to see the price of bitcoin skyrocket.” – on the digital asset overcoming ESG hurdles.

Read More: A managing partner at a venture fund that’s backed more than 30 billion-dollar blockchain projects compares the technology today to the dot-com boom of the 1990s – and breaks down 4 platform types and the cryptos leading each one into the future

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‘Shark Tank’ star Kevin O’Leary says decentralized finance could be the future – and plans to launch a DeFi investing company

kevin oleary shark tank
Kevin O’Leary.

Kevin O’Leary revealed on Anthony Pompliano’s podcast that he’s a major shareholder of a new decentralized-finance (DeFi) company, which aims to help investors profit from DeFi. The “Shark Tank” star and O’Leary Funds boss also predicted DeFi will play a key role in crypto’s future, and said he’s deeply interested in the space.

“What interests me the most right now is DeFi. I think it’s where the puck is going,” O’Leary said.

O’Leary said that DeFi enables him to wrap up crypto assets into Ethereum chains to make a profit, whereas storing capital in crypto investments does not allow that.

“There must be millions of people who have a little bit of coin who want to make some 4%, 5%, 6% on it,” was the thought that led him to ask his team to find experts on the matter, which they did in the Canadian startup DeFi Ventures.

The company is working to find a commercial solution to DeFi investing, enabling anyone who has a wallet to wrap their assets and utilise DeFi’s benefits automatically and in a compliant way.

O’Leary said he led a $20 million fundraising round for the company, which has yet to go live. “I am going to rename it to WonderFi because it is going to be my vehicle and I think it’s just the beginning of some great things to come,” said the investor, whose nickname is Mr. Wonderful.

The investor also said that bitcoin’s recent volatility has boosted his DeFi investments and driven up profits. “We’ve had tremendous volatility on bitcoin these last ten days. That actually enhances DeFi, it makes it better. I’m making way more on my contracts now,” he continued.

Higher returns are also making him consider shifting his asset allocation. While he currently still holds 5% gold and 3% crypto, this might change as gold does not provide him with returns, O’Leary said.

Talking about his start in the crypto industry, O’Leary spoke about the ESG concerns linked to cryptocurrencies and how they were raised by many of his institutional and sovereign fund clients. However, that didn’t deter him from going long on bitcoin, he said on the podcast.

At CoinDesk’s Consensus conference on Monday, O’Leary said that bitcoin needs to become more sustainable to attract institutional investors, and a more environmentally friendly way of mining the cryptocurrency could see its value rise as high as $200,000.

Read the original article on Business Insider

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.
  • See more stories on Insider’s business page.

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.”

Read the original article on Business Insider

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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