Kevin O’Leary Discusses the Large Potential of Stablecoins

ABC’s Shark Tank star Kevin O’Leary is considering to increase his crypto allocations up to 20% once there are clearer regulations around stablecoins. This would make crypto a much more viable investment he said.

O’Leary, who used to be among the loudest of Bitcoin (BTC) skeptics is now an advocate for the top cryptocurrency.

Speaking with crypto news magazine Cointelegraph in an interview published on YouTube, the Shark Tank host, also dubbed “Mr Wonderful”, discussed Bitcoin, stablecoins, crypto portfolio allocation, the US inflation and its impact on the crypto markets.

The man who now holds over 10% of his investment portfolio in Bitcoin, is very much focused on U.S. dollar-pegged stablecoins, which can be considered as an effective hedge against rising levels of inflation. He pointed out that up to 6% returns are possible when staking stablecoins:

”When inflation is 6%, your buying power 12 months from now is 6% less. And that’s a lot. […] I’m a huge advocate for solving this problem with stablecoin.”

With a clear regulatory framework in place, O’Leary would be able to confidently convert large cash positions into stablecoins. This is not possible yet due to regulatory constraints that cap this amount to 5%. He said:

“I cannot afford to be not-compliant. That’s not possible for me. Everything I do has to be compliant by the regulator. Otherwise it causes chaos in my business. Business Says.”

He added:

“With my own compliance department, they’re considering stablecoins as an equity, no different than a stock.”

O’Leary is not the only one that sees benefit in stablecoins and his excitement is shared by many institutional investors. Rest assured, he said, they are “working on it quietly in the background” waiting for regulation to kick in.

In contrast to stablecoins, while holding a significant portion of his investment portfolio in Bitcoin, Ethereum (ETH) and other cryptocurrencies, the Shark Tank host cites the underlying volatility of these assets to be a concerning factor and a barrier for large institutional positions.

“You’re not going to get there to a 20%, 30% in Bitcoin in an institutional or sovereign mandate, you’re just not. Stablecoins have that potential.”

In the beginning of the year, O’Leary caused some uproar when discussing China and Bitcoin mining that was still taking place in the country. The Canadian investor said that it is important to know where your Bitcoin “comes from”, or in other words has it been mined in countries with human rights issues.

“If you don’t want to own China coin, also being called ‘blood coin’, which sounds like blood diamonds, you’re going to prove where your coin is born…”