Venture capitalist and Shark Tank star Kevin O’Leary says that the collapse of large and overleveraged crypto companies could be beneficial for the nascent industry.
In a new interview on CNBC, O’Leary says that a wipeout involving a major player with complicated positions could be good for any financial market.
“Let me explain how bottoms are made in any market. I don’t care if you’re in equities or in debt or in crypto or in real estate. You always need a big player to go to zero. That always helps whether it’s a long-term capital or whether it’s one of these crypto infrastructure companies.
I don’t want this to happen, but it always gives you a good bottom when you get a large player, overlevered, that goes to zero. That always tends to be the beginning of the rebuilding process, so if you have to sacrifice someone who used too much leverage, and it’s always leverage, somebody’s overlevered. Positions are complicated. They’re not transparent. They’re not liquid, and they go to zero.
Someone is out there on the brink of zero. That’s okay. In fact, I’d argue that’s a good thing when we get it.”
According to O’Leary, the meltdown of a large crypto firm will be a boon to those who manage to stay alive.
“It’ll be great for everybody else that survives because everybody will learn from that, and that’s what I like about a washout event. I think we’re due for one in cryptoland, and I don’t know who it’s going to be, but I guarantee you 100% I’ve seen this movie before. You will learn later that somebody put on a heavily-levered position. They got wiped out, and it’s good. It’s a good thing.”
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The post Shark Tank’s Kevin O’Leary Explains Why Wipeout of Large Digital Asset Firms Is Great for Crypto appeared first on The Daily Hodl.
