Kevin O’Leary compared the volatility in the cryptocurrency markets to the early days of Big Tech in an interview this week.
The billionaire investor compared Bitcoin to Amazon directly in terms of price volatility, which he sees as an opportunity.
Bitcoin is off to a bad start, but investors will have to get used to it, as is the case with Amazon, he told Yahoo Finance. Aaron Davidson/Getty Images
In an interview with Yahoo Finance Live earlier this week, the Canadian billionaire described crypto as the biggest opportunity for investors in 2022, with volatility expected. He also noted that the current sell-off in technology stocks was a potential buying opportunity.
Shark Tank investor Kevin O’Leary has compared the high volatility of the cryptocurrency markets to the early days of the biggest tech companies, which underwent similar volatility in the early days of the dot-com boom before becoming a market leader.
“When you get volatility, in general, in my world, I take advantage of it. Because I have to spread capital all the time, and I have to decide: Where am I going to put it?
“I love growth, and I understand it’s going to be choppy. And on days like these, I remind myself I’ve seen this movie before.”
O’Leary noted the rough start of tech stocks to 2022 and how that shaped against past performance.
“Go back 17 years to Amazon, which I’ve owned for almost this entire stretch. We had 30, 40%, 50% corrections every year. Still, look where you end up today,” he said in the interview.
Amazon has endured great ups and downs during the internet boom and bust. The value of its shares went from less than $8 in mid-1998 to around $100 in six months, before peaking at $110 a year later and then crashing back to less than $10 by early 2001. It is now worth more than $3,000, And Amazon is one of the world’s most valuable companies.
“And so I look at it, and I say to myself: Let’s learn from the past, apply that to the future, and take advantage of the ups and downs.”
“Bitcoin has had one of its worst starts ever. But you have to get used to it, just like you had to get used to Amazon, where it will have 30% to 50% corrections, same with bitcoin,” O’Leary said.
Bitcoin has seen sharp volatility over the past year, rising to over $64,000 in early 2021, before falling back below $30,000 in the middle of the year, and then climbing to a record high of nearly $69,000 by November. It has since fallen almost uninterruptedly, and by Thursday it was around $43,750.
Drawing the comparison between Amazon and bitcoin, O’Leary said that investing in Big Tech and cryptocurrency is basically the same as investing in software.
“Bitcoin is not a currency, it is actually a software. Blockchain is software, Ethereum is software, HBAR is software, and Polygon is software,” referring to cryptocurrencies used in decentralized finance.
“So the real decision is if you want to invest in software – because it is a productivity tool, like stocks like Google – why not invest in software like ethereum? Because it offers a special service in payment systems that are used globally.
O’Leary – his nickname “Mr. Awesome” – also talked about the potential for more crypto regulation and the benefits it could bring. “If we make it regulated, if we bring the institutions into it and find a way to make it compliant, trillions of dollars are going to come into this space, because it has a practical use,” he said.
He noted that it is “not close to 20% in cryptocurrency” and has just crossed 10.7% in its operating company.
The billionaire investor said he uses the same diversification rules for cryptocurrencies that he applies to stocks and bonds. Although he has not disclosed all of his holdings, he is known to hold bitcoin, ethereum, and US dollar stablecoins.
Business news highlights
- ‘Shark Tank’ investor Kevin O’Leary says today’s crypto market is like the early days of Big Tech in the 1990s | Currency news | Financial and business news
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