Well-known investor Kevin O’Leary said he isn’t ready to call a bottom in the crypto sector short of a major negative occurrence.
“You don’t get a bottom until you have an event,” O’Leary told CoinDesk this week. “In the crypto world, we need someone to go to zero.”
While such occurrences obviously aren’t positive for the players involved, these types of “panic events define bottoms,” O’Leary said, as markets capitulate before crawling out from their lows and slowly recovering, according to O’Leary.
WonderFi and Canada
O’Leary spoke to CoinDesk ahead of the June 2022 move to the Toronto Stock Exchange from Canada’s NEO Exchange of WonderFi, a crypto marketplace and registered trading platform in which O’Leary and FTX CEO Sam Bankman-Fried are strategic investors.
O’Leary credits the move to the company’s enhanced oversight and compliance, as well as the work it’s done with regulators on listing new coins and services. He said Canada’s crypto industry doesn’t allow for excess leverage, meaning WonderFi clients aren’t at as high a risk of margin calls.
Institutions, family offices, or individual investors “need to know with certainty that they’re not trading on a rogue platform,” he said. The need for “completely compliant infrastructure” is necessary.
O’Leary thinks global jurisdictions have and should take note of Canada’s crypto policy. “When you walk in with a Canadian flag on your back and you start talking about compliant crypto, people listen,” O’Leary said.
Of the latest market rout, O’Leary said the volatility has been a plus for WonderFi and has boosted trading activity.
Adoption and regulation
For increased institutional crypto adoption, further regulation is necessary as institutions should be able to gain crypto exposure in the same manner they would stocks and bonds.
O’Leary thinks stablecoin regulation is a place to start. He noted how USDC has held up amid recent crypto volatility, given its cash and short duration treasury bill backing. “The market is really receptive to something stable as a payment system,” he said.
Additionally, O’Leary sees stablecoin regulation as a bipartisan issue. “Everybody wants to support the default currency, the U.S. dollar,” he argued.
