?? Diversification recommended in the crypto sector
?? BTC investors invest in software
?? call for regulation
Crypto Investing: Diversification is the be-all and end-all
Investor Kevin O’Leary, one of the judges on the TV show “Shark Tank”, the US version of “The Lion’s Den”, was long considered a critic of cryptocurrencies, but now counts himself among the supporters of the trend around Bitcoin & Co. The entrepreneur, also known as “Mr. Wonderful”, recently spoke in an interview with “CoinDesk” about building his crypto portfolio – and advised investors to diversify. “Multiple stocks, multiple tokens, multiple coins, multiple blockchains,” O’Leary told the crypto portal. “I own so many of these.” He is primarily invested in Ethereum, but also owns Bitcoin, Solana, Polygon and 28 other cybercoins. The market expert emphasizes how important it is to protect yourself by investing in a wide range of different cryptocurrencies. “In my world, I can invest up to 20 percent in cryptocurrencies, and within that subset, no position will be greater than 5 percent,” O’Leary says of his personal portfolio. The moderator firmly expects that in the long term there will definitely be a distinction between winners and losers in the crypto sector, for which investors should prepare. “You will see the rise of cryptocurrencies. Not all will be the same. … I will not be bankrupted if a 5% position goes to zero.” However, crypto exchanges could benefit from the trend, which he considers “potentially lucrative. In the long term, according to the expert, both decentralized and centralized exchanges could successfully coexist.
Bitcoin is not a coin, it is software
Nevertheless, he leaves nothing to chance when putting together his crypto portfolio. “I don’t know which of these platforms will win, so I own them all,” he continues. “I’m investing in the long-term future of a global company.” He does not see bitcoin as a coin, as there is no physical counterpart to it. Instead, it is exclusively program code that maps software, similar to products from tech giants such as Microsoft and Google. “So the real decision is whether you’re willing to invest in software, because it’s a productivity tool. It offers a service, especially for payment systems that are used worldwide,” the investor emphasizes his point of view to “Yahoo Finance”. Although cryptocurrencies are usually much more volatile than stocks, this is a matter of habit for investors. “Bitcoin is off to one of the worst starts [in das neue Jahr] Anyway,” O’Leary continued. “But you have to get used to it, just like you had to get used to Amazon, where they had these corrections of 30 percent to 50 percent, so it is with Bitcoin.”
regulation required
After the trend around cryptocurrencies became suitable for the masses last year, the industry could be influenced by official measures this year. With the broad market acceptance, the crypto industry can now be understood as a sub-sector of the global economy, as he explains in an interview with CoinDesk. “The real potential of crypto is not just that of an individual, but that of institutional capital,” the expert said. Although the decentralized financing flowing into the crypto market could lead to more transparency, resilience and cost reduction in the industry, it is the large market participants who are likely to identify as beneficiaries here. “You’re going to see a lot of institutional capital flowing into these areas because of the economic benefits,” O’Leary said. According to the expert, however, regulation of the industry could remedy the situation. “If we [Kryptowährungen] regulate, if we get institutions to look into this and find a way for them to be compliant, trillions of dollars will flow into this area because it has a pragmatic use,” the market insider told Yahoo Finance .
Stablecoins recommended as inflation hedge
There is also still room for improvement in the area of stablecoins: After withdrawing from real estate investments, the entrepreneur invested his realized profits in the stablecoin USDC as protection against inflation. According to CoinDesk, there were some problems here. “My own compliance department does not consider stablecoins as cash, but as equity,” he continues. This means that he cannot hold more than five percent of stablecoins. “Right now I really need the regulator to make a policy for stablecoin,” the investor said. The crypto fan also recently commented on the need for them to “Cointelegraph”. “If inflation is 6 percent, in 12 months your purchasing power will be 6 percent less than it is today. And that’s a lot. […] I am a big supporter of solving this problem with stablecoin.” The cryptocurrencies, whose price is linked to an existing fiat currency, are particularly attractive for institutional investors because there are fewer price fluctuations than, for example, with Bitcoin, which is considered volatile You won’t get 20 percent or 30 percent in Bitcoin with an institutional or government mandate, that’s just not possible. Stablecoins have this potential,” the expert told the portal.
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Regulation also to protect the environment
But even apart from this problem, according to CoinDesk, O’Leary is said to have already called for regulatory measures for the crypto industry. The investor had already spoken out in favor of regulations in connection with Bitcoin’s poor environmental balance last year. For example, O’Leary demanded that institutions wanting to engage in bitcoin trading need ESG-compliant options. Environmentally friendly mining methods are also necessary, so that a subdivision into “clean” and “dirty” Bitcoin can be made.
Bitbuy acquisition by O’Leary investment WonderFi
The fact that O’Leary is serious about its involvement in the crypto sector is also shown by the recent acquisition of the DeFi platform WonderFi, in which the market size invested. At the beginning of the year, the company announced that it would take over the Canadian crypto platform Bitbuy. “The integration of WonderFi and Bitbuy is a major step forward in our mission to democratize finance through easy and secure access to DeFi and crypto,” said WonderFi CEO Ben Samaroo, according to a press release. “A licensed marketplace serves as a key gateway to the digital economy, enabling a robust, unified customer experience. The integration of Bitbuy’s product suite will accelerate and expand the reach and scale that WonderFi can bring to the market, driving long-term growth and value for increase the company.” And Bitbuy was also pleased about the deal: “This transaction represents an exciting new chapter for Bitbuy,” said company president Dean Skurka. “Joining WonderFi’s talented team and the many operational synergies present opportunities for future growth that we can collectively share with our customers, employees and shareholders.”
“Year of the NFTs”
In addition, the crypto fan is also optimistic about the NFT trend. “NFTs have only just begun to move into real markets and because of that, I believe 2022 will be the year of NFTs,” he predicts, speaking to CoinDesk. The technology behind the irreplaceable, digitally protected objects has the potential to transform several industries. “Physical assets that I always use as a use case are collectible watches,” explains the entrepreneur. “I have a huge collection of watches and the secondary market for used watches is 10 times that for new watches every year. It’s a multi-billion dollar market. And it’s suffering from some really big problems.” So it is a big challenge to check the authenticity of the collector’s items. However, the insurance premiums are also very high. According to the watch collector, the tokens could be used here. “With NFTs, I could have the insurance companies bid on the watches outside the vault and I would save hundreds of thousands of dollars in insurance costs. [ ] When you scan a watch at the micro level of the dial, the fingerprint is fed into the NFT system and then you never have to worry about authenticity again. You simply scan the watch again with your cell phone and you can find out whether it is the original watch or not.” There are also numerous other use cases for the “multi-billion dollar market”, including jewellery, cars and real estate.
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