Well-known businessman, entrepreneur, and cryptocurrency investor Kevin O'Leary believes that the crypto market has not seen rock bottom yet. Despite the bear market and what's been dubbed "crypto winter," he believes a "panic event" is needed for crypto to truly bottom out.
Waiting for the 'big event'
"What I'm doing right now is I'm waiting, I'm waiting for the big event as I call it," he said. He went on to describe this event, saying, "It'll be a day of panic, we'll be down somewhere between 2 or 3,000 points. And yes, it's horrible to talk about it, but that actually is very very healthy. I think this is actually a maturation process for the crypto market."
Some might have thought that crypto has hit its bottom because major coins such as Bitcoin have been in the red for months and hitting intraday lows. But O'Leary remains positive. He sees the software behind these coin projects as a new necessity for financial services. And believes that in the future, crypto will be the 12th sector of the economy. Whether many of these coins stick around, he is confident that the technology behind them is a highly valuable payment system that will be embraced in the coming years.
Stablecoins must be backed by real assets
He also commented on the Terra LUNA stablecoin disaster that happened last month. He generally separated crypto projects into two categories: highly speculative and traditional. He placed UST and LUNA in the former, noting they have been "re-priced dramatically," to put it kindly. "Highly unlikely that the context of stablecoins will ever return to their own prices because people have figured out that a stablecoin should be stable and that means it has to be backed by something of asset value. You can note that the USDC did not correct that way, in fact during the period of this mass correction of other algorithmic or other quantitative or speculative stablecoins, that really really got crushed,” said O'Leary.
He noted that the company that issues USDC raised hundreds of millions of dollars in Fidelity and Black Rock resulting in unprecedented equity for the company. He sees this as the difference between the type of (actually stable) stablecoins and the others which seem like arbitrarily valued retail products. He includes NFTs in this category, noting the correction on that front. He said, "The Las Vegas side of crypto has had a nightmarish correction and I think that's very good in the sense that it helps separate the wheat and the chaff or the cream from the milk if you wish… Because the traditional projects have remained relatively stable."
He believes that the volatility currently being experienced in Bitcoin and Ethereum is natural and will continue until there's policy in place around it.
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