Kevin O’Leary Says ‘Panic Event’ Is Needed Before Crypto Bottoms

The strategic investor spoke to CoinDesk ahead of crypto marketplace WonderFi's move to the Toronto Stock Exchange.

AccessTimeIconJun 15, 2022 at 10:00 a.m. UTC
Updated Sep 29, 2023 at 11:58 a.m. UTC
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Well-known investor and "Shark Tank" star Kevin O’Leary said he isn’t ready to call a bottom in the crypto sector short of a major negative occurrence.

“You don’t get a bottom until you have an event,” O’Leary told CoinDesk this week. “In the crypto world, we need someone to go to zero.”

While such occurrences obviously aren’t positive for the players involved, these types of “panic events define bottoms” as markets capitulate before crawling out from their lows and slowly recovering, according to O’Leary.

WonderFi and Canada

O’Leary spoke to CoinDesk ahead of WonderFi's June 22 move to the Toronto Stock Exchange from Canada’s NEO Exchange. WonderFi, a crypto marketplace and registered trading platform, counts O’Leary and FTX CEO Sam Bankman-Fried as strategic investors.

O’Leary credits the move to the company’s enhanced oversight and compliance, as well as the work it's done with regulators on listing new coins and services. He said Canada’s crypto industry doesn’t allow for excess leverage, meaning WonderFi clients aren’t as at risk of margin calls.

Institutions, family offices or individual investors “need to know with certainty that they're not trading on a rogue platform,” O'Leary said. “Completely compliant infrastructure” is necessary.

O’Leary thinks global jurisdictions have taken – and should take – note of Canada’s crypto policy. “When you walk in with a Canadian flag on your back and you start talking about compliant crypto, people listen,” O’Leary said.

Of the latest market rout, O’Leary said the volatility has been a plus for WonderFi and has boosted trading activity.

Adoption and regulation

For increased institutional crypto adoption, further regulation is necessary as institutions should be able to gain crypto exposure in the same manner they would stocks and bonds.

O’Leary thinks stablecoin regulation is a place to start. He noted how USDC has held up amid recent crypto volatility, given its cash and short-duration Treasury bill backing. “The market is really receptive to something stable as a payment system,” he said.

Additionally, O'Leary sees stablecoin regulation as a bipartisan issue. “Everybody wants to support the default currency, the U.S. dollar,” he argued.

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Michael Bellusci is CoinDesk's crypto reporter focused on public companies and digital asset firms.


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