This story was originally published in The creators – a newsletter about the people who run the creative economy. Get it sent to your inbox.
Kevin O’Leary is a Canadian entrepreneur best known, of course, as “Mr. Wonderful,” a regular co-host of the hugely popular TV series Shark Tank. Like many other celebrities, he has also been involved in the world of non-fungible tokens ( NFT), and is particularly interested in how they transform the art market.Recently, O’Leary was photographed by fashion photographer Udo Spreitzenbarth in a print that was transformed into an NFT through the NFT.com platform.The Observer’s executive editor James Ledbetter recently took up O’Leary; this transcript has been edited for length and clarity.
Observer: Tell me a little about how you got involved in NFTs and how you think they affect the art world.
Kevin O’Leary: I got involved with NFTs, not to switch them; I’m far more interested in authenticating physical assets, and it started for me with watches. I have a very, very large watch collection. And over time, the complexity of insuring them in different cities, different vaults became problematic. And one of the solutions we found was to make NFTs for the chips. So I could tell the insurance companies, which cities, which vaults, what I travel with, because I just want to insure the watches that are outside the vaults. It’s the same problem for my modern art collection – you know, what pieces are lent out, and that’s how I got into the rabbit hole.
So take me from that to how you think NFTs affect the art world.
There are two ways. First, original NFTs, JPEG images, although very unstable in price, have come on the scene in the last 36 months. The ape series, for example, I remember someone trying to sell me one for $ 262,000 90 days ago. It is now trading for $ 60. I do not know if it’s worth $ 60 at all, but it does not matter. Some do. And so that market has entered a phase of billions of dollars in both directions up and down, but it does not go away. Digital artists create unique NFTs and never physically reproduce the same piece. And they are able to authenticate it on the Ethereum blockchain. When I saw it happen, I said to myself, if you go back to the gold rush and look at what happened there, it was better to own the notches and the shovels and the jeans, than you were trying to choose which hole to dig. for gold.
And I started looking around for companies that serve the NFT world, and that do not necessarily sell NFTs. And then I found Immutable Holdings, run by a man named Jordan Fried. He owns NFT.com. It is a public company, I am a shareholder now, but it was he who actually helped Udo marked his NFT for the art exhibition in New York. I was not prepared to buy the art unless I had an NFT. Now I own the art and I own NFT and my insurance company also has access to NFT.
Interesting. The readers of this newsletter are usually people in the creative economy. People who have very influential accounts on TikTok or Instagram who create videos, who create other types of content, how would you advise someone like that to enter the NFT world?
I would advise them to be careful. One of the challenges we have right now with NFTs is, are they a commodity or are they a security? Let’s say you issue an NFT that gives you tickets to the Formula 1 race in Miami next February, and you buy it. Now that’s one of the benefits of owning that NFT. Is it a currency or is it a commodity or is it a security, like a stock that pays dividends? If you trade in these and are offside, it would not be a good result. That’s why I’m very, very careful about getting involved in NFTs right now.
There was a kind of NFT boom last year, and somewhere towards the end of the year, through most of this year, trading volume has declined quite dramatically. Do you think it will affect how these objects behave?
No, not long term. Go back 20 years to Amazon, the name everyone knows. I was a shareholder from almost day one. And I remember for the first 17 years that the stock price would collapse 38 percent to 57 percent, every 11 months. NFTs are the same. They’re going to be very, very volatile, and you have to keep your nose up when it comes to volatility. Creators will continue to participate and grow. The platforms will be more stable. What we really need in this room is politics. Digital is here to stay. NFTs are here to stay. We are in the first place, but for the creators who are engaged in this now, they are the pioneers. Some of them will end up with arrows in the back and some will be okay.
It is interesting that you talk about it in the context of American law. I’m curious, since you’re Canadian, if there’s any difference in how these things are handled up there.
Canadians are far more advanced. I am an investor in a (crypto trading) company called WonderFi. We have 800,000 accounts in Canada. We are falling dramatically behind in the United States. No doubt about it. You have all these people coming out of MIT and other great colleges and universities, and when you ask them where they want to work, they all want to work with the blockchain. They are leaving America, they are working in Dubai. They work in the Caribbean islands. So it’s a huge brain drain. Billions of dollars in intellectual capital are leaving the country to make money elsewhere. Right now, Canada is the leader followed by, I would say, the United Arab Emirates, Switzerland, England.
This interview was originally published in The Creators, a newsletter about the people who run the creative economy. Get it in your inbox before it’s online.
