Although investor Kevin O’Leary says bitcoin is a “giant nothing-burger” and has compared it to gambling, he owns some, along with a few other cryptocurrencies.
“I have a crypto wallet,” says O’Leary, which he created on Coinbase in 2017.
At the time, “I was lecturing at Harvard Business School, and the students challenged me to be an investor in crypto. And I said, ‘You know what? I have no problem with that. In fact, I’ll risk a hundred dollars.'”
With his $100, O’Leary, who is chairman of O’Shares ETFs, bought about $16 worth of each digital coin available at the time, which included bitcoin, ether, XRP, bitcoin cash, litecoin and XLM. As of Feb. 2, O’Leary said his wallet’s worth had dropped to $88.97.
Kevin O’Leary points to his Coinbase crypto wallet.
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“How come I didn’t make a ton of money? Because not all cryptocurrencies are equal,” he says. “That’s why I don’t really love this crypto stuff. You have to guess which coin is going to move.”
Compared to the others, “the only one that’s really worked is bitcoin. All the rest are crypto crap.”
Although he says bitcoin is the best cryptocurrency, O’Leary still would not put a lot of money into it.
“Should I respect it? Yes, I’m not against it. But would I put a lot of capital into it? No, I don’t want to own something that goes up and down 30% in a day or a week,” he says.
According to O’Leary, the problem with cryptocurrency overall is that it’s “not backed by anything. It’s just backed by your faith.”
“It’s engineered scarcity,” he says, referring to the fact that there is a finite supply of bitcoin.
So if bulls hold their stake believing demand and ultimately price will increase, bitcoin will become more valuable because there is less on the open market. But those cautious about bitcoin warn that it is a market bubble.
“Every time I teach that class [at Harvard], I hold [my crypto wallet] up and say, ‘Hey kiddies … I don’t have $100 back yet,'” O’Leary says. But, he admits, “I having fun with this. That’s what it’s worth. We’re having fun. Nothing wrong with that.”
Still, says O’Leary, “I really would like to know how to get back that 18 bucks that I’ve lost. Who do I call? Which cryptonite knows how to do that?”
Disclosure: CNBC owns the exclusive off-network cable rights to “Shark Tank.”
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