Related articles
Contrary to the buzz surrounding institutional interest in bitcoin, Kevin O’Leary, renowned as a ‘Shark Tank’ star, has some stark revelations. He points out that despite recent chatter, major Wall Street players are not actually venturing into bitcoin investments.
While asset management giants like BlackRock and Fidelity have taken steps towards establishing the first bitcoin spot ETFs, O’Leary argues that this might not materialize in the current regulatory climate. According to him, the ongoing federal scrutiny of the crypto industry is a significant deterrent.
O’Leary emphasized, “People talk about, ‘there’s great institutional interest in bitcoin.’ No, there isn’t. They don’t own any of it, and they’re not going to own it while [SEC Chair Gary] Gensler’s suing everybody.”
The SEC’s aggressive legal actions against major players in the crypto space, and its stance on certain tokens as unregulated securities, has created a tense environment. Notably, Coinbase and Binance, two of the largest crypto exchanges, faced legal action this summer for alleged regulatory infractions.
In O’Leary’s view, this limits the options for institutions like BlackRock, as he questions the suitability of exchanges under regulatory fire. He believes placing an ETF on an exchange involved in legal disputes with regulators is improbable.
O’Leary pointed out that Binance, once a powerhouse, is undergoing significant downsizing. The intense scrutiny faced by its co-founder Changpeng Zhao further adds to the apprehensions of potential institutional investors.
Drawing attention to the trial of Sam Bankman-Fried, whose mismanagement led to the collapse of FTX exchange, O’Leary suggests that the era of ‘crypto cowboys’ is fading. He emphasizes that for the industry to flourish, it needs a regulatory framework that encourages investment within the US. Otherwise, we might witness a shift of institutional interest towards more transparent exchanges in other regions.
In O’Leary’s view, for bitcoin to truly appreciate in value, it must be traded on a compliant, regulated exchange approved by the local regulatory authority. The current landscape in the US doesn’t seem to align with this vision, leaving potential investors to seek opportunities elsewhere.
Discussion about this post