Shark Tank Investor Kevin O’Leary Compares Volatile Crypto Markets to Google, Microsoft and Amazon

Shark Tank investor Kevin O’Leary says he still sees cryptocurrencies as a viable investment class despite the recent selloffs that have shaken the markets.

In a new interview with Yahoo Finance Live, O’Leary compares Bitcoin (BTC) and Ethereum (ETH) investing to the early days of some of the world’s leading tech companies which experienced violent price movements before becoming industry leaders.

When asked what he thinks the biggest opportunity for investors is in 2022, the Shark Tank star says,

“The one that I really found interesting over the last 24 months has been crypto and blockchain technologies and tokens and NFTs [non-fungible tokens].

You have to make a binary decision about this stuff, and this is very difficult for many institutions… and many of them have not even started their journey into cryptocurrencies…

This is how I wrap my head around it and I think it would help investors to think this way. If you invest in Microsoft and Google and Amazon and so many of these other platforms, what is the core you’re investing in?

Google is software. Bitcoin is not a coin. It’s actually software. The blockchain is software…

So the real decision is if you’re willing to invest in software because it’s a productivity tool as an equity, such as Google, why wouldn’t you invest in software such as Ethereum? Because it provides a service… that is being used globally.”

O’Leary next lays out his strategy of how to wade through the muddle of investment options in the nascent digital asset space by sticking to allocated portions within his overall portfolio.

“The question is which coins, which tokens, which blockchains? And for that I apply the same rules of diversification I apply to my stocks and bonds.

No more than 5% in any one position. No more than 20% in the whole sector.

I’m not anywhere near 20% in crypto. I’ve just gone over 10.7% in our operating company.”

The macro investor says he will accept crypto’s extreme volatility and reminds people that Amazon often saw wild price swings before achieving market dominance.

“I have a plethora of positions. I’m going to make the decision there that this is even more volatile than technology equities, and it certainly is. Bitcoin is having one of its worst starts [to a year] ever.

But you have to get used to it, just like you have to get used to Amazon where it would have these 30% to 50% corrections. Same thing with Bitcoin.”

At time of writing Bitcoin is up slightly to $42,682, while number-two crypto asset Ethereum is up 4.67% to $3,236.

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Why Kevin O’Leary thinks NFTs could become bigger than Bitcoin

Millionaire investor and crypto proponent Kevin O’Leary thinks that the NFT sector could be worth more than Bitcoin in the future.

Speaking with CNBC’s Capital Connection on Jan. 5, O’Leary — also known as Mr. Wonderful — argued that NFTs provide a greater potential to attract capital than Bitcoin due to their ability to tokenize and authenticate physical assets such as cars, watches and real estate:

“You’re going to see a lot of movement in terms of doing authentication and insurance policies and real estate transfer taxes all online over the next few years, making NFTs a much bigger, more fluid market potentially than just Bitcoin alone.”

Mr. Wonderful admitted however, that he is not tied to that bet and will still be investing on “both sides of that equation.”

The former crypto skeptic told Cointelegraph in a recent interview that his change in tune towards blockchain and digital assets was due to the growing trend of regulators warming up across the globe over the past couple of years.

Not everyone agrees with comparisons between Bitcoin and NFTs however, with Coingecko digital marketing associate Khai Ren Kuan telling Cointelegraph that it’s “probably not fair to compare Bitcoin, which is a single asset, to NFTs which are an entire sector.”

Kuan did note however, that the NFT adoption curve in 2022 is only going to increase upwards as the sector is still in its early days:

“I think collectively if you look across all NFTs, and the fact that 2021 was year one of market adoption, there’s definitely still a lot of room to grow.”

“We’ve already got a set of ‘blue chip’ NFTs, but I think the industry is still barely scratching the surface of what NFTs could be and what they could do, particularly if the Metaverse comes to fruition,” he added.

Related: Global search interest for ‘NFT’ surpasses ‘crypto’ for the first time ever

Coingecko recently published a new book called “How to NFT” which provides a rundown for newbies entering the nonfugible space on how to buy, sell, store and mint NFTs. Questioned on whether he thinks the “NFT art narrative” will continue to dominate in 2022, or if the trend will shift towards utility-based NFTs, Kuan said:

“Arts and collectibles are always going to be high on the list as they’re the most beginner-friendly and easiest to understand. In terms of utility NFTs I think what’s probably interesting to watch for is how some NFTs are going to both be art, and have utility.”

“We’ve seen BAYC which the NFT doubles as membership into their ‘club’, and it really helps build a sense of identity and community,” he added.