As Bitcoin plunges by more than 20 per cent after breaking the US$40,000-mark last week, US Shark Tank judge Kevin O’Leary has weighed in on the hype.
O’Leary, who made his fortune after starting a consumer software company in the ‘90s and selling it for US$4.2 billion to toy manufacturing company Mattel at the height of the dot-com bubble, revealed in a YouTube video on his channel that he would not invest in Bitcoin.
“Bitcoin is a nothing-burger,” O’Leary said. “A giant nothing-burger….Not every institution is willing to play ball with it.”
O’Leary went on to say he expects regulators to “come down hard” on Bitcoin, and when that happens, Bitcoin will crumble.
“Grown men are going to weep when that happens,” he said. “You will never see a loss of capital like that ever in your life. It will be brutal. And, I’m just saying you have to get ready for it.”
But while he won’t be putting his money into the controversial cryptocurrency, O’Leary said he believed there would be “tremendous value” in a global digital currency.
“If there was an attempt, [with] Bitcoin itself or another currency, that could be traded everywhere with a regulator agreeing to it ... then you’d have something of tremendous value,” he said.
“That way, I could keep half of my net worth in the digital currency and just flow. I could buy groceries, buy a house with it.
“That is a vision that is really attractive, versus this tiny little thing that, for some people, is an outlier and that in many ways isn’t liquid or isn’t easily liquid,” he said, referring to Bitcoin.
Don’t believe the hype, experts say
Stockspot founder Chris Brycki also revealed in a YouTube video on Monday that the worst time to invest in Bitcoin is when it’s in the news.
“Bitcoin tends to get into the news after it’s had an amazing run up, usually after it’s doubled or tripled in a short amount of time,” he said.
“But ultimately that’s the worst time to be investing, because inevitably Bitcoin also has big falls along the way, and all of these people who have bought end up losing money and probably selling out,” he said.
So, if you’re seeing it in the paper, that’s probably not the time to buy, he said.
“If no one’s talking about it, that might be the time to get involved.”
JPMorgan’s bit bet
Earlier this year, investment bank JPMorgan predicted Bitcoin prices could reach as high as US$146,000 (AU$188,000), if it managed to establish itself as a safe-haven asset, like gold.
To do that, the market cap would need to increase by around 4.6 times to match the US$2.7 trillion gold sector, something that would likely take years.
It would also imply a “big upside for Bitcoin” that would see outflow from gold and into the coin, something that would depend on the digital currency’s volatility.