Kevin O’Leary says “rogue” crypto fans are hurting the industry
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Mr. Wonderful wants to see more crypto regulation.
Important points
- Kevin O’Leary says that a small part of the crypto community stands in the way of increased adoption and investment.
- The debate highlights a divide in the crypto community over regulation.
- Circle’s Jeremy Allaire believes crypto must become easier to use if it is to reach the next billions.
Hai tank‘s Mr. Wonderful is one of cryptocurrency’s most famous endorsers. But he is not blind to the problems facing the industry. And while he’s a big believer in blockchain and crypto, it’s also fair to say he’s not that enamored with much of society. In fact, he believes die-hard crypto fans are preventing digital currencies from moving to the next level and beyond.
In fairness, the feeling is mutual — O’Leary has come under fire from those same fans for his views, particularly on regulation. Let’s find out more about one of the major divisions in crypto and what it could mean for the industry as a whole.
Two of crypto’s biggest stumbling blocks right now
In a recent crypto conference, O’Leary sat down with Circle’s co-founder and CEO, Jeremy Allaire. Circle is the company behind the USDC stablecoin. Speaking at Converge22, the pair discussed crypto fatigue, how to increase adoption and the role of increased regulation.
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1. It’s too complicated
Both men agreed that crypto has a long way to go in terms of usability. If you’ve ever tried setting up your first crypto wallet or using any of the decentralized applications, you’ll probably agree. It’s doable, but your grandma might struggle to pull it off. O’Leary said, “Wallets are too complicated for all people.” He added: “It’s a mess.”
Allaire put it another way: “For the next 500 million to a billion people to get involved in this, the encryption of it has to go into the background.” Taking the crypto out of the crypto means making it more like sending an email. When you send an email, you don’t need to know what’s going on behind the scenes – what matters is that your message gets sent. The Circle co-founder believes the same must happen with crypto. “I think this is a critical part of the next wave of adoption,” he said.
2. Rogue crypto fans
O’Leary had some harsh words for certain sections of the crypto community, labeling them “rabid” and “rogue”. He believes they are holding the industry back. His concern is that old-school crypto enthusiasts don’t want regulation and see decentralization as the only way.
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Got started
“It’s a very tight little crypto community of really rabid fans if you want to call them that,” he said. “It’s – in my view really – starting to hurt this space because a lot of them don’t believe in regulation, a lot of them only believe in decentralized, a lot of them are frivolous in terms of the way they think.”
The popular entrepreneur and successful investor is an outspoken advocate for crypto regulation, especially when it comes to stablecoins. It was only when crypto became better regulated in Canada that O’Leary was able to invest. He believes that regulation will bring trillions of institutional dollars into the market, money that currently sits on the sidelines because the compliance departments of major firms will not approve crypto investments.
The problem for more traditional crypto followers is that regulation flies in the face of the entire ethos of Bitcoin (BTC). Bitcoin was designed to be a decentralized digital currency that worked without the involvement of banks or central government, and regulation would change that premise.
What it means for investors
It has been almost a year since Bitcoin reached its all-time high. Since then, prices have fallen considerably and the lead crypto is down 70% from last year’s high. The only real cause for celebration in recent months is that Bitcoin has lost some of its volatility. It has hovered around $20,000 since mid-June.
Greater economic conditions are partly to blame for the prolonged bear market. Rising interest rates, the specter of an economic downturn, and the absence of the stimulus that helped propel crypto to extraordinary heights have all caused investors to move away from riskier assets like crypto.
But that is not the only problem. Confidence in the crypto market is low, especially after the devastating collapse of Terras LUNA. And the concerns about usability and regulation raised by Allaire and O’Leary could both have an impact on how the industry performs in the long term. On the one hand, regulation can build confidence and more people can invest as a result. On the other hand, it can stifle a nascent industry and make life more difficult for crypto exchanges and investors.
The bottom line
Maybe you’re considering buying crypto, or trying to figure out what to do with your existing crypto portfolio. The golden rule is to ensure that crypto is only a small part of your overall investments and that you only invest money you can afford to lose. That way, you’re positioned to make money if prices rise again, but you won’t lose your entire portfolio if prices crash.
There is a chance that crypto prices will not only recover, but also continue to reach new highs. O’Leary actually thinks crypto could become the 12th sector of the S&P 500. But there are no guarantees. And as these two industry heavyweights highlighted, crypto companies have a lot of work ahead of them to build adoption and trust.
