Kevin O’Leary says he wants more than double crypto holdings to 7%

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Celebrity investor Kevin O’Leary says he wants to at least double his cryptocurrency holdings by the end of 2021, and predicts “billions of dollars” could pour into the market if crypto becomes news asset class.

The “Shark Tank” investor previously said bitcoin was “garbage,” but then changed his mind.

O’Leary, who is chairman of O’Shares ETFs, said he was bullish on crypto and wanted to allocate more of it in his personal wallet.

“I want to increase my exposure to crypto currently from 3% to 7% by the end of the year,” he told “Capital Connection” on Monday.

But he said investors want US authorities to make decisions on the regulation of cryptocurrencies.

“I don’t want to get involved in crypto if the regulator says it’s wrong,” he said. “I can’t afford to be offside, I can’t afford to be non-compliant.”

The US government is developing regulations for cryptocurrencies, even as more countries legalize bitcoin. Just last week, El Salvador became the first country in the world to adopt bitcoin as legal tender.

It’s not going to go away, it’s the new asset class.

Kevin o’leary

Chairman of ETF O’Shares

O’Leary has said he expects regulators to recognize cryptocurrencies as an institutional asset class, but it’s unclear when that will happen. He added that the infrastructure for compliance is also lacking compared to systems for traditional assets.

However, he predicts that there will be “trillions of dollars in interest pending membership” when regulators finally approve cryptocurrencies as an institutional asset class.

For bitcoin in particular, if regulators allow financial services companies to treat it as an asset and approve bitcoin-based exchange-traded funds in the United States, it sees “another trillion dollars in purchase” in cryptocurrency.

“It’s not going to go away, it’s the new asset class,” he said.

Short on airlines

O’Leary also said he is betting against the airlines because “business travel will never go back to what it was” before the pandemic struck.

“I think the business travel aspect of airlines is horribly bad, and I make money bypassing airlines,” he said, referring to a negotiating technique that says investors borrow shares from a broker and sell them, in the hope that they will be able to buy them back at a lower price.

“It’s not that I don’t like airlines, but I think they’re in a very bad deal.”

Airlines have been hit by border closures and travel restrictions since last year, when Covid first struck. They endured uncertainty as the virus rises and falls in different parts of the world.

“These are bad, bad, bad businesses. Not just because of pandemics because people don’t have to fly,” he said.

CNBC’s MacKenzie Sigalos and Arjun Kharpal contributed to this report.

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