Shark Tank Judge Kevin O’Leary Bullish On Facebook’s Libra says Bitcoin Would Soon Come Down to Zero
Kevin O’Leary from Shark Tank and chairman of O’Shares ETFs says is quite bullish on Facebook’s nascent crypto project Libra. He claimed that he has owned Facebook shares throughout his life amid all the political crapola and noise.
During his attendance at “Halftime Report”, on Tuesday O’Leary compared Facebook’s Libra with Bitcoin and predicted that the pioneer of the cryptocurrency space which has an inherent value would eventually turn to zero when a regulated product like libra becomes mainstream. He is quite optimistic about the chances of libra despite the ongoing controversy surrounding the social media giants. He said,
“Give me a common currency that’s regulated by the government and let me go to work as an investor.”
O’Leary Is Not A Big Fan Of Bitcoin
O’Leary is among the well-known naysayers of Bitcoin claiming that it has been created out of thin air, and since it is not backed by anything, it would eventually turn to zero. During one of the most viral debates between O’Leary and co-founder of Morgan Creek Anthony Pompliano, a big-time Bitcoin proponent, he was countered on every aspect of his belief. When O’Leary claimed that Bitcoin is not backed by anything, Pomp shot back with the case of Federal reserves.
Although Pomp countered him on most of his beliefs, O’Leary maintained his ignorance. So, it is quite ironic that he is quite bullish on a cryptocurrency which is trying to mimic Bitcoin but does not have the necessary specifications of being called as a cryptocurrency under SEC guidelines. He justifies his bullish behavior on Facebook saying,
“I spend millions of dollars on Facebook each year across over 50 companies because we can geo-lock our message to specific markets at different prices. No one else can do that for me. Others try; they’re the best.”
O’Leary claims that Facebook monopoly in the targeted-ad business would eventually pursue the US lawmakers give a nod to its crypto project as it benefits the American Business. He also claimed that despite the current criticism, there is no way the project would be completely shut down.
He also explained why he is not a big fan of Bitcoin,
“The reason I hate bitcoin is that it doesn’t solve any problems unless I’m a criminal, a thief, a drug dealer, or I want to get around the rules. I don’t want to do that. I don’t want to support that.”
Libra Is Being Bashed By Senators Left Right And Center
Right after the announcement of Libra cryptocurrency project back in June, the regulators and policymakers from around the globe started sharing their concerns over the working model of Libra. These regulators claimed that if Facebook goes ahead with the financial model that is mentioned in the whitepaper, it could potentially disrupt the existing financial sector. These regulators also accused Libra of trying to piggy ride on the existing banking sector for free, while the banks and financial institutions had to pay millions in compliance fee itself.
Amid growing concerns, US lawmakers summoned Facebook for a Congressional hearing, first before the Senate Banking Committee on Tuesday followed by another grilling session by the House of Representatives on Wednesday. Facebook was represented by its blockchain lead and former Paypal executive David Marcus. The senators did not go easy on the Facebook executive and grilled him for hours in both the hearings.
The questions of senators varied from Facebook’s intention of venturing into the financial sector, to the nature of the cryptocurrency scheduled for launch in 2020. Senators questioned Facebook’s claims of Libra being truly democratic since it would be looked after by a constroinium of 28 financial and tech firms, but how is it democratic if the constronium of firms were not elected democratically. Marcus was constantly reminded of Facebook’s shaken reputation in managing private user data. Facebook was also questioned on why
While Marcus assured the policymakers that Libra is committed to fulfilling all the regulatory obligation before the official launch, the Senators did not look convinced, It would be interesting to see how Facebook alters its previous plan to keep on track their official launch of 2020.
However, despite all the concerns surrounding Libra, O’Leary believes it’s the regulation that would give the validation to Libra over Bitcoin.
O’Leary Is Convinced Libra Would Be a Success
O’Leary says Libra’s value would be stable since it would be backed by a basket of fiat currencies and regulation would ensure that it is easily available to everyone. He explained that the volatility of Bitcoin makes it an uncertain investment option. Bitcoin price swing makes it drop by 30% in a matter of hours and eventually, it would touch the zero mark as well.
While O’Leary remains bullish on Libra and not so much about Bitcoin, the regulators who would decide the fate of Libra thinks almost in contrast. It was quite a pleasant surprise to note that many US lawmakers are well aware of Bitcoin and its advantages over tradional Federal Reserve backed Fiats. One of the Senators even lauded Bitcoin as a technology that cannot be killed while many called Libra as a for-profit crypto token which is trying to milk on the ongoing decentralization trade. One of the Senators went as far as comparing Libra to 9/11.
O’Leary is known for his ignorant behavior but puts out many valid points on why he thinks Libra would be a success. He says,
“I want to go long on Canada… I want to buy a Canadian index, like XIU [iShares S&P/TSX 60 Index ETF]. I had to move out millions of dollars and convert it into Canadian [dollars]. What a pain in the hiney that was, as every FX trader tried to clip me for 20 bps ” But, “if I had something like [Libra] that was working and regulated, I could take $5 million, stick it in this payment system, and buy equities in there because it is a regulated payment system.”
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