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Why Kevin O'Leary Sold 27 Crypto Positions, What He's Investing In Now | Markets Outlook
00:28:39
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- [00:00]
A
I sold 27 positions when I started to see the analysis of my own analysts. And luckily I missed that meltdown on October 20th. But I, you know, I took a hit on ETH and BTC, but it's come back a lot more than the poo poo coins have. And, and those, some of those poo poo coins are never coming back. They're just, there's no reason to them.
- [00:28]
B
Hey, everyone, you're watching Markets Outlook. I'm Jen Senassi. Andy Baer is here with me today, and we are joined by Shark Tank investor o' Leary Ventures chairman and actor Kevin o'. Leary. Hey, Kevin.
- [00:39]
A
Great to be here. Thank you.
- [00:41]
B
Thanks for joining us. Now, I got. We got to start with the acting thing. Congrats on your acting debut. How does it feel?
- [00:48]
A
It's a whole new space. It's a different discipline. You know, I used to be a cameraman back in the late 80s and I was an editor. I played Steenbach. So I feel like I've come home. Although this is all, you know, quite different. I mean, promoting a feature like this has been a real experience. I've really enjoyed it. And I'll see you on the red carpet at the SAG and at the Oscars. I'm, I'm excited.
- [01:11]
B
Yeah. I mean, I can't speak for Andy, but I'm definitely rooting for you. Are we going to see you on the big screen? Is this like a new career path for you? We're going to see you do more movies.
- [01:21]
A
Well, I've got three offers right now. I'm going to do one film a year in addition to everything else I do. I think there is a, an intersection, actually. I think if you think about media being part of a marketing strategy for investing, I think it's kind of worked out for me. I want to be the bad guy in the next Bond movie. I think no one else can do it the way I can. Everybody will die. I'll build a lot of data centers and I'm going to blow a lot of stuff up.
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B
You think we could get bitcoin into the next Bond movie?
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A
I think bitcoin will be. And I'll tell you why. Because whoever controls AI will be the next villain of the earth. And he'll finance it all by using some portion of his data facility, power generation to minecoin. That's a great script right there.
- [02:07]
B
I mean, I think it's a great script. So there's at least two people here that think that that could work out. Okay, let's Talk about what we're here to talk about and that is the crypto markets. Let's start with Bitcoin because we were just talking about it just under 90,000 this morning. Just talk to us about how you're watching Bitcoin as we get deeper into 2026.
- [02:27]
A
Well, of course I've indexed BTC and ETH. I don't expect any significant capital appreciation until we clear the Clarity act or the Infrastructure act or whatever you want to call it. It's stalled. Brian at Coinbase is part of that reason, but I understand his complaint. It seems unfair to me that those who hold a stablecoin can't get yield in the same way a bank dollars provided some form of yield. And so we need to resolve that. And I think the authors of the bill and the staffers writing it, both on the Gillibrand and Hagerty sides, both red and blue, understand that this is a roadblock we ought to fix. And we have to fix it because we need this act to pass to allow people think that Bitcoin is an institutional or sovereign wealth product. It isn't. It's a teenage pimple in terms of the asset class that it could be if it was given a designation finally and made compliant as far as the SEC and the regulator is concerned.
- [03:28]
C
Kevin couldn't agree more there. And one thing that's missing is kind of this distribution army that helps get other investment products and asset classes out to the masses. Whether it's advised money or self advised money or structured products like annuities, that's where the trillions lay. That distribution army seems a little under formed at the moment. What do you think it will take for that kind of groundswell of support? You know, some financial products have to be sold, not just bought. How long will that take? And you know, do you see that really taking root in the United States over the next 12 to 18 months?
- [04:05]
A
Well, it goes back to, as you've detailed, precisely the issue. So I index equities for a lot of these sovereign wealth and Those who use ETFs for market structure. So I'll give you an example. If you talk to a sovereign wealth fund that might have 500 billion under management in a fund, they'll put up to 5% in any one asset class, whether it's equity or debt. They would do the same with btc. They would do with Bitcoin too, except their compliance departments don't have any flexibility in allowing to do so because they have to be SEC compliant. They're pouring in 500 million an hour into the indexes in the S and P. So they can't have one asset class offside. So I would argue that we need that passage of that act and then it's going to be where. And this is where the analysis is both good, bad and ugly. Because I've actually dealt with this in the last few weeks because there was a lot of optimism that this bill would pass. For the first time ever, the analysts who do the indexing have started to work on what positions in crypto they would put on when given a mandate to add 1 1/2% weighting. Just what do they put on? They're agnostic, they don't have any emotional attachment, they don't care. They simply look at the aggregate data. They look for liquidity. And how do you capture the most alpha, the most volatility, both up and down with the least amount of positions to manage? They're not incentivized to own 27 positions. They don't want to do that because they have to manage that with compliance. And when you do the data, it's quite depressing. You get 97.2% of all the alpha of the entire crypto market with simply two positions, BTC and eth. That's it. You don't need anything else. And that's one of the reasons in Q4 you had a complete collapse of what I call the poo poo coins. And they haven't come back. There is no good news for poo poo coins. No indexer is going to buy any of them. They're worthless in terms of capturing alpha because there's such a correlation between a poo poo coin and btc. And until you somehow differentiate that so that you could outperform crypto by owning a different basket, but you can't, in 16 years, you can't beat just ETH and BTC. And so it's a very sobering message that they're giving the market about. And you know, I know there's advocates and you know that they love this blockchain product or that blockchain product. I'm sorry, nobody cares. And so you fight this awful battle of having to raise hundreds of millions of dollars. If you're the foundation or this chain or that chain, nobody cares. Your price is not on the ticker at the bottom of Al Jazeera or on Fox or on cnn. It's just BTC and occasionally eth. I mean, that's it. So I think that's just going to be a real Wake up call for the industry.
- [07:16]
C
Will those allocators ultimately allocate to the tokens themselves? Wrapped products, structured products, ETFs, futures? Or you think they'll go all the way and look for custody and develop, you know, Primitives holdings?
- [07:31]
A
Yeah, I mean if you're running $500 billion and you're the Norway sovereign or Canada pension plan, you're not buying etf, you're not paying anybody fees on anything and you've already figured out you only need to own BTC and Ethereum and you can wrap it anyway. Those guys know how to do all that stuff. They can just hire cryptogrunts to do that work. They don't have to hire. I mean, they're not going to buy a DAT or a Treasury. Those things already had brutal corrections. Everybody lost their money on those things because there's no added value other than fees. The sobering reality here we are and know nobody likes this message. But I'm sorry, it's true, you know, it's sort of. It's all software. That's all it is. And so there's nothing magic about another chain, whatever token you want, it's just software. And you've got to figure out the use case for that beyond eth, because 70, when we cleared the the genius act, 72% of every transaction on every stable coin is happening on Ethereum. Why, if you're a sovereign wealth fund, would you ever do anything else because some guy's telling you it's better? Of course not. It's all software to them. And so, and the other narrative that's emerged recently, which I've been tracking quite closely as an investment theme, is when I talk to the big money setter guys about digital payment systems because I use stablecoins now for real estate transactions in other geographies and my watch collection, well, that's my own personal thing. You know, I buy a lot of watches from Switzerland, but they are thinking private blockchain attached to quant security that they control, which means they're going to bypass everything, you know, every name you know, you've heard of that's been touted to be better than ETH because it's faster or they don't care. They're saying, wait a second, if, if, if security is why people give us confidence and invest in us, why would we take a chance on anything other than something we built ourselves? So I don't think that's not great for ETH, by the way, and my weighting is 2/3 BTC 1/30 and I put that on in early October. I sold 27 positions when I started to see the analysis of my own analysts. And luckily I missed that meltdown on October 20th. But I, you know, I took a hit on Ethan btc, but it's come back a lot more than the Poopoo coins have. And some of those poo poo coins are never coming back. They're just. There's no reason to them. And so I think we're at a maturation narrative you and I are having right now about the future. And it's a healthy thing because I'm excited about this, the passage of the Clarity act. And then you want to belong btc.
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B
When that happens, I mean, as you're speaking, I think about Solana. Anthony Scaramucci released a book on it, Bitwise is saying Solana is, is the next Wall Street. That's not the exact quote, but what's your take on Solana and this narrative that's being pushed that, you know, this is the chain that could potentially overtake Ethereum and, and be the chain that Wall street chooses.
- [10:40]
A
Look, I love Mooch. We're close friends. We know each other very, very well. He knows what I think. He better raise 200 million a month in marketing dollars out of the foundation just to even get close to catching up to Eth's narrative of on both social media. How do you get to it? He is like that mythical figure in Greek mythology pushing a giant boulder up a mountain and you never get to the top. And I'm sorry, but I can give you five other chains with the same story you've never even heard of because they have no marketing dollars. Solana is just software. That's all it is. And there's nothing magic about it or special or anything else. And I agree with him. At the time when the DAT came out, it made sense because you could buy that as an equity and have at least some yield. But that narrative lasted six weeks and you lost two years worth of yield on a correction on your underlying security. So, you know, look, I mean, we all. Well, I'm not going to say this about Mooch. I make mistakes sometimes, but I don't allocate more than 5% weighting to my mistakes. So I march on and I learn from them.
- [12:03]
C
So you bring up, you know, the Sisyphean task of trying to promote other change. I think the other Sisyphean task that the industry has is to try to apply, I guess, other analytics besides technical or quantitative to the price of Tokens, meaning fundamentals. Ethereum could probably Bitcoin is a macro asset, that's fine. But Ethereum could probably stand to have a more growth asset like fundamental analysis applied to it. It might make more investors feel comfortable about betting on Ethereum's long term prospects. Will that arrive and what form do you think it'll take? Or. Or do you think it just doesn't matter? It's about adoption and growth and correlation with stablecoin growth and tokenization growth.
- [12:49]
A
I'm in the second camp. It doesn't matter because unfortunately, with, you know, more than a decade of data, when you're an analyst and your task is to figure out what positions to put on to capture 90% of the Alpha, you don't care about the backstory. You only care about liquidity because you're putting out 50, 100, $200 million on a single trade at 1005 and you may rebalance 20 million of it at just a 355. You're not Kumbay on the story. You're not part of some Reddit chat group. They don't give a damn. And, and I think it's very sobering to meet these people and understand you can't give them a new backstory about how exciting the new blockchain is. If it's so exciting, go make it. You know, have a better alpha than the two positions you put on. But that's not their job. I think we came out of a wonderful period of exploration, the crypto cowboy period, the excitement about decentralized finance. And then the fox came into the hen house and ate all the chickens or whatever the analogies you want. A lot of it was just bs. And now, unfortunately, it's very sobering to realize there's no benefit to spending your time on that stuff. You don't get anything for. You're not paid anything to do it, so why should you do it? And there's this finite tiny group of Kryptonians, or whatever you want to call them, that fight this out all day long, and I admire them, I think it's great. But that's not how you're going to make money. I think it's over. And also, as you opened at the beginning of our conversation, there are trillions of dollars waiting on the sidelines to index here. But unfortunately, there's only two girls at the dance. That's it.
- [14:35]
C
So the other, you know, let's go back 25 years, 25 years ago, the idea was let's democratize opportunity by focusing on software. Right. And software yielded the Internet and crypto and AI and Nvidia proved that. Hang on a second. You know, there are scarce resources, there's land, there's commodities, there's power, there's hardware. A lot of your recent efforts have been focused on turning back into that path, into scarcity and actual things that require scale to build that you can't start in a basement. How do you, I guess, align your Bitcoin and ether allocation strategy with this idea that you also want to be building, you know, the fishing poles and the fishing line and the tackle boxes, not just, you know, going out fishing?
- [15:25]
A
Yeah. So I take off 27 positions, I've now got a boatload of cash and I want to stay 19% allocated to crypto. That's my dilemma. So I looked at the landscape, talked to the guys that I work with, the analyst guys, and I said, where do we go from here? And the answer was power. It all goes back to power. So what we did is we allocated to Power three. So we look, if you think, let's go just to BTC mining. So. And I started this one back, I don't know, seven or eight years ago in upstate New York behind the grid and the Niagara Falls. I think we only had at the time 600 acres or something. And we were going to build 300 megawatt mining facility, and that got shut down by the difficult permitting environment in New York still exists. We moved the assets to Norway. They were bought by a company called Bitzero. And Bitzero's premise was we get power contracts sub 6 cents a kilowatt hour, we get land and permits, we get water and we get four corners of fiber and we search the landscape until we can find that. Which they did. And they got, you know, in a village in Norway and they were in early enough before the moratorium went on. So they have expansion rights and they don't care whether they provide the power to Bitcoin miners or to data center cloud users or AI compute. They don't care. They simply own everything related to power. And then they did the same thing in Finland. Now, I was an early investor in that thing and I added more to the position since it went public. So BITC is now a public company trading on the cboe, which is in Canada because it started as a Vancouver company and I'm assuming the management will uplift it at some point to a US exchange. But I don't care because it's been one of my best investments in 2026. And you saw Novo do the same thing at Galaxy. He basically doubled his capacity in Texas and said I'm no longer just BTC trading guy. I don't care about that. That's one business. What I care about is where the puck is going and that's power. So I did the same thing. Privately I've announced that I have 13,000 tied up in Alberta. 13,000 acres with 6 trillion cubes of stranded net gas. And ever in the last two weeks I have, I can't disclose yet where it is because I don't have the permits locked up yet but another 13,200 acres, same situation stateside. So all that capital moved away from the poo poo coins into the infrastructure that you're speaking of. And I think that is where the best place to be in, in crypto is because I don't care whether it's AI guys or I've got all kinds of bitcoin miner guys calling me because my contracts are sub 6 cents a kilowatt hour. I mean I'm mine in Norway that company's mining BTC and I think at 52,000 a token and against the 90k that's, that's fantastic free cash flow. So I think the same thing will happen. This diversity towards power is going to be a big part of the crypto story and also the data centers or the requirements of canister based miners. The community doesn't like you when you attach to the grids. You got to bring your own turbines and that's expensive. But every one of my projects now involves the debt markets where I'm financing two cycle turbines. My guess is that that's going to perform better. Well, maybe I should put it this way. I think power is more valuable than bitcoin. That's the way I'm looking at it.
- [19:10]
B
There was a time, Kevin, when I asked you this question and your answer were tokens like hbar and Avax, it sounds like you sold your positions there. But if an investor came to you today and said you're betting on power, where should I put my money? What are the three infrastructure plays you would recommend?
- [19:28]
A
Well, I think the no brainer which I have also I took some of those Poopa coin dollars and put them into Robinhood and Coinbase. I mean Robinhood's the only place right now you can put an equity beside crypto and manage a portfolio and it's done very, very well. That's pure infrastructure. That's the trading platform. The guys at Coinbase are the de facto standard when the act Passes for small and medium sized business. I mean that's the place to put your stable coins and then transact with your vendors if you wish, or with suppliers. So I think that's a safe bet. But most of the infrastructure stuff that I'm investing in now, where it's attractive, where the returns will be 11 to 17% are private so that, you know, that's not as liquid. So the Alberta project, I just did another financing for that one last week. All private capital and funny enough, some of it came from the actual engineering vendors that have been looking at the project for two years now. They want a piece of it, they see the merit of the strategy. Same thing in our other facility. It's private dollars. It's not as easy. I mean obviously Bitzero is public, anybody can invest in that. But that was private for five years. So these things will come public. Why? Because to access debt and equity markets. I mean each Alberta is a $70 billion debt and equity 13.8 gig campus. That's huge. And the same thing for the other facilities stateside. I mean, and by the way, I may be wrong, but I don't think so. I went kind of in reverse. I decided without the land, the water and the power permits, you weren't going to get there. And that's from my real estate days. I used to build climate control storage facilities. The boxes looked just like data centers. I have now under control 26,000 acres all on land with stranded net gas or piped nat gas at sub 6 cents a kilowatt hour. I think I'm the largest on earth with that portfolio. I don't know of any fund or individual with more than that. I know it sounds arrogant, but I think it's true.
- [21:40]
C
Now in terms of what people can access in liquid markets, how about the underlying commodities? Nat gas, oil, coal, electricity. Will the new generation capabilities keep those prices in a range or is there a medium term thesis that those will become more expensive?
- [21:58]
A
On that theory, I would go copper first. The amount of copper I'm going to have to buy just for the first 1.4 gig, 1 gig of compute power. So point 0.4 of redundant power. I mean my copper prices have almost quadrupled in the last 18 months. I would also stay long. Gold. Gold's way outperformed BTC as you well know. But I don't think that's forever. I love quantum security. This is very embryonic, but I've met with two groups now that are doing quant security on blockchain, private and public Very interesting there because I think there's some portion of the market, I would guess it's 10 to 15% that will not buy BTC and index it because of this story about using quant computers to break the chain. You've heard that, you know, so I think that's investable infrastructure. I would also look at the IHC companies that are controlled by the uae, many of them own infrastructure, step down generators, two cycle turbine manufacturers, I've invested there. This is a longer play you're talking about. This is kind of a 36 month to 5 year kind of thing. And the other signal, I know it was a bombastic speech that Trump gave in Davos 48 hours ago, but wow, I mean, you know, you gotta listen to the whole thing to pick. There's a lot of noise in there, but there was some signal and what he signaled that made me and a lot of other people interested was this thing that he wants to accelerate path to permit federally on coal and nat gas electrical generation because he's concerned. The Chinese developed 514 gigs last year of which 110 were solar. But the rest, almost 400 gigs was all coal burning power, electrical. They don't need permits, they just build it. So they're going to kick our ass in data center development if we don't get going. So that means states, certain states, I wouldn't bet California, New York. But others are going to give investors like me fast path to a seven, seven month turnaround as opposed to seven years. Because the Trump administration wants that at a federal level that's very good for all things crypto and all things AI and all cloud compute. So that's a big investment theme. You got to go where you can get a permit. And I think, you know there's a lot of big funds out there looking for two. I mean you're talking, you, you need a minimum now for 1.4 gig, 2500 acres. You need water, you need fiber, you need air rights, you need it all. And you gotta package that with local government and the governors and the senators and that I have a wicked competitive advantage. And I know this sounds corny, but it's true. They all want pictures with their kids of the shark tank guy. So I get into every office red and blue. I'm just sorry. It's true.
- [24:51]
B
All right, Kevin, we started the conversation with the Clarity Act. I want to finish it there. We mentioned Coinbase pulled support for the act. It has kind of stalled right now on three issues. Ethics, defi and stablecoin. Yield, like you mentioned at the beginning of our interview, do you think that they come to resolution and we have market structure legislation before the midterms?
- [25:12]
A
Well, you're right, but I put 80% weighting on yield on stablecoins as the big issue, maybe 90. The other two don't matter as much. There'll be some kind of compromise. There's too much momentum for everybody in this industry. Get this thing resolved. But Coinbase has the biggest issue because many people open those accounts just to have a place to manage their stable coins. So they have to provide competitive yield against the Money center bank or regional bank. It's ridiculous that that's not a level playing field. And obviously the banking sector, it's rather interesting that Trump sues Jamie Dimon at the same time. This thing's being debated. But think of the advantage the Money center bank has with the Fed. They take your money, they offer you 11 basis points in your savings accounts. They take that, park it at the Fed, make 3.8% and they keep the spread. What's fair about that? I mean, why can't. Why am I not getting that like. And I can get that on a stable coin. I can get 3.5 right now or lend it out with some leverage and make seven. But if this bill passes that way, that's totally unfair. I've let my voice know, and I'm going to Washington next week to make more noise about it. It's just unfair. And that's. And that's un American, and that's the way I'm going to look at it.
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B
Does it pass before midterms?
- [26:28]
A
Well, you're tough. You know that? You're tough. I think it has to because these bills are written by staffers. People don't understand. And so the staffers are spending on this bill probably 80% of their day right now. If something else comes along and they come off it, you won't be able to move it forward. And right now you can get a meeting with the staffers, both red and blue, and you can talk them through what you. They listen to everybody. I mean, they're Democratic that way. They listen to everybody and they try and create a law that's going to be productive for both sides. It's really bipartisan, frankly. It's not really a partisan bill in that sense. So I'm hopeful it's going to pass. Give you My estimate May 15th.
- [27:15]
B
All right, Kevin, on that note, can we just do.
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C
Kevin, can we just do a quick wristwatch check before we sign off? Would you Indulge us.
- [27:22]
A
Yeah. I'm going in for a wardrobe fitting for. For the red carpets coming up in the award ceremonies. And I wanted to go as a vampire, you know, with the. The big red thing. And I actually have Nicolas Cage's cape. And so I said to the jewelers that are, you know, a lot of jewelry companies, watch companies, and Rolex is one of the companies that makes beautiful. I mean, this is an example. These are both Rolex. This is the rainbow, and this is the eye of the tiger. So for the fitting where I'm going to now, we're going to try and check out that ruby vampire dripping blood, really nasty, you know, guy that I am in Marty supreme, and I want to bring that forward. Now, whether the academy is okay with a vampire walking down the red carpet, yet to be determined.
- [28:13]
B
I love that.
- [28:14]
C
Rolling in with stereo Daytonas. That's.
- [28:16]
A
Yeah, yeah. This, by the way, I mean, these. These are spectacular pieces. Grown men weep in front of these. I mean, these. These are spectacular. Thank you.
- [28:25]
B
All right, we gotta go before Andy starts weeping. Kevin, thank you. Thank you so much for. For joining us. It's always a pleasure having you on.
- [28:32]
A
Thanks. Take care. Bye. Bye.
- [28:33]
C
Thanks, Kevin.