Deborah D'Souza
6 min read
Despite big bets by financial giants like BlackRock, many investors still have trouble taking cryptocurrency seriously. And it’s not just the memes and quirky fans pushing people away.
In 2022, about 8% of U.S. adults called cryptocurrency the best long-term investment around. That number has been cut in half ever since the collapse of crypto exchange FTX wiped out nearly $9 billion in customer funds.
Now, just a few years later, crypto bull Kevin O’Leary says those kinds of debacles are a thing of the past.
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“All the crypto cowboys are gone. They’re all gone. They’re all in jail, they’re felons, or whatever it is,” he told the press in mid-May at the Consensus cryptocurrency conference in Toronto.
“They were the pioneers (but) they’ve got arrows in their backs … They didn’t play by the rules. And the regulators proved who won that fight.”
Mr. Wonderful says he has reserved nearly 20% of his portfolio for crypto-related assets, including stablecoins, tokens and exchanges. His confidence is infectious, but curious investors still have to ask: Is the sun really setting on the Wild West era?
O’Leary is intimately familiar with crypto scams. He was a paid spokesman for FTX, and he claims the entire fiasco cost him millions.
“Now that that’s over, we can move ahead, and I think everyone understands the potential of this market,” he said.
While O’Leary likely didn’t mean to imply all crypto scams are finished — he seemed to be referring to embezzlement and fraud at trusted firms like FTX — he’s optimistic about the impact of two bills coming before Congress.
One is the GENIUS Act, which would require stablecoin issuers to hold a 1:1 reserve of cash or another liquid asset, amid other protections.
Stablecoins are a type of cryptocurrency that is pegged to another asset, usually the U.S. dollar. That’s why these digital currencies are considered more “stable” than other cryptocurrencies like Bitcoin. Proponents like O’Leary believe they will make global digital payments faster and cheaper.
The other piece of legislation is the market infrastructure bill that would define each individual asset as a security or commodity so that the appropriate regulator — either the Commodity Futures Trading Commission or the Securities and Exchange Commission — can oversee it.
