The latest big shot investor to join the Bitcoin (BTC) naysayers along with Warren Buffet, Nouriel Roubini, and Paul Krugman, is Shark Tank’s Kevin O’Leary, who said Bitcoin is “garbage.” O’Leary’s negative comments came in an interview with finance news outlet CNBC, published on May 14.
Bitcoin has hit $8,000 for the first time in nearly a year, but not everyone is impressed with the cryptocurrency's massive growths. "It is a useless currency… To me, it's garbage," @KevinOLearyTV said. https://t.co/sh7LflgtcL pic.twitter.com/jX19q7ySlO
— CNBC (@CNBC) May 14, 2019
Why So Negative?
O’Leary is a successful Canadian investor, businessman, and television personality who founded a number of successful companies and has a net worth of over $400 million. He is an influential individual in the mainstream media, as he starred in Shark Tank, the American business reality show on ABC, and others.
Therefore, he’s someone the Bitcoin community wants to be behind Bitcoin, not against it. So why is he so negative?
During the CNBC interview, O’Leary said Bitcoin is a useless currency because people accepting it need to hedge against its volatility. To him, this is a huge problem because it cannot be used very easily. He even shared a personal story in which he tried to use Bitcoin in Switzerland for a real estate transaction.
According to O’Leary, his experience was very negative:
“You can’t get in and out of it in large amounts. But everyone says, yes, you can. But, what happens is the receiver wants some guarantee. Let’s say you want to buy a piece of real estate for $10 million in Switzerland. […] They want a guarantee that the value comes back to you as currency at ten, you have to somehow hedge the risk of bitcoin. That means it’s not a real currency.”
Since Bitcoin is volatile and the receiver accepting it must hedge the risk when accepting it, O’Leary surmises that Bitcoin is worthless.
Regardless of what O’Leary and all the other Bitcoin naysayers think, the fact of the matter is that Bitcoin is valuable. A large majority of people find it useful, if not as a currency, then certainly as a store of value.
How can we solve Bitcoin’s volatility problem to make it more effective as a currency? Let us know what you think in the comment section below.