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20% of my portfolio is in crypto


Celebrity investor Kevin O’Leary told CNBC on Friday that a fifth of his investment holdings are tied to cryptocurrencies and companies operating in the nascent digital asset industry.

“I have millions of dollars, 20% of my portfolio is now in cryptocurrencies and blockchain,” O’Leary said in an interview on “Squawk Box.” Blockchains are the distributed digital ledgers on which cryptocurrencies operate.

Cryptocurrencies have attracted considerable attention and investment in recent years, including from major institutions and high-profile figures like hedge fund manager Paul Tudor Jones and fund manager Bill Miller. Many view bitcoin, the world’s largest cryptocurrency by market value, as a long-term store of value. There are also a multitude of other smaller digital tokens.

Crypto backers say there are still early profits for the industry — bitcoin itself has only been around since January 2009. Yet crypto startups are attracting billions of dollars in venture capital.

At the same time, the booming asset class remains volatile, and regulators like Securities and Exchange Commission Chairman Gary Gensler have warned of its “highly speculative” nature and lack of investor protection. The outgoing chairman of the UK financial regulator also warned against pump and dump patterns in some digital tokens.

Among the crypto critics, billionaire businessman Charlie Munger, longtime partner of Warren Buffett and vice chairman of Berkshire Hathaway, also criticized digital currencies and their volatility. In February, he said he wanted the United States to ban them. Buffett isn’t a fan either, calling bitcoin in 2018 “the rat’s death squared.” Others have compared bitcoin to a Ponzi scheme.

Asked by CNBC’s Andrew Ross Sorkin if some cryptocurrencies won’t even be around in a decade, O’Leary said he took this risk factor into consideration.

“You have to be diversified. I own 32 different positions, including FTX equity itself,” O’Leary said while revealing that he’s a paid spokesperson for the cryptocurrency exchange, founded by 30-year-old billionaire Sam Bankman-Fried.

“The thing is, you don’t know who’s going to win. Will Ethereum win? Will Solana win? Is it Helium or is it Avalanche? I own them all,” O’ said. Leary, who is co-host of “Shark Tank” and makes other venture capital investments. He is also the founder and chairman of ETF O’Shares.

O’Leary’s comments on Friday come two days after President Joe Biden signed an executive order directing the US government to analyze the cryptocurrency industry. The administration says the purpose of the order is to both address risk while “harnessing the potential benefits of digital assets and their underlying technology.”

“It wasn’t a total ban, so that’s good news,” O’Leary said. However, he expressed concerns about how Biden’s directive emphasizes the climate risks associated with cryptocurrency.

The act of mining bitcoin – which, in practice, means running computers to verify transactions on the blockchain network – requires a lot of power. As a result, critics have lamented the carbon footprint of bitcoin mining.

O’Leary said he has invested in at least one private bitcoin mining facility. However, he said he sold his positions in publicly traded bitcoin mining companies after Biden’s executive order.

Disclosure: CNBC has exclusive off-network cable rights to “Shark Tank.”


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William

Friendly bacon buff. Unapologetic problem solver. Avid food lover. Amateur alcoholaholic. Organizer. Student
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