Today’s “Crypto for Advisors” newsletter Kevin O’Leary, entrepreneur and investor Kevin O’Leary shares both his opinion and his paper on crypto investment, and how both have changed over time.
MLTECH CEO Leo Mindyuk then answers questions about how daily investors can access these investments in “Ask An Expert to Experts.”
– Sarah Morton
Rethinking Crypto Investing: Looking beyond digital assets
From garbage to money: Why code?
In 2019, I made headlines by calling Bitcoin “garbage.” At the time, there were no regulations or oversights. It was chaos. The government was hostile and unsure of how to approach code. Now the scenery has completely changed.
For days before regulatory agencies came into existence, cryptography pioneers (Koboys) made a ton of money from the early volatility of cryptography. Even in this high-risk landscape, the crypto market has proven to be extremely productive.
Today the market is now in use Others include valuable stores, digital payment systems, or stablecoins. But we’re still early – the adoption of cryptography is not close to that possibility.
Speak restrictions
In the Post-Wild West landscape, everyone is looking for the next big event that will encourage price discovery. It is clear that this possibility exists in institutional investment. Major financial institutions, sovereignty funds, etc. do not employ crypto. One of these bodies weighting BTC to 1% will send price discoveries to the month. Disability is a regulation.
Regulations began with Bitcoin ETFs. First available in Canada, then in the US and Europe, they are now the gateway to Wall Street codes. Another important regulation was the act of American genius, which guaranteed stubcoin against USD. Collectively, this law shows an increasing institutional belief in cryptography.
The US Senate’s Digital Asset Market Structure Bill and the US House of Representatives are two upcoming regulations to watch. Both create a cryptographic regulation framework. Many investors expect bullish markets to pass the law and continue to regulate. The current price levels of BTC probably show this predictive mindset. We are waiting for the lock to open.
Own a pick and a shovel
When considering crypto assets, it’s easy to overlook the infrastructure needed to expand the adoption of the scheme. I’m very vocal about my “pick and shovel” strategy. If you’re in the crypto market, you need to own the infrastructure you support and take advantage of the crypto-related returns without much worrying about the coin price.
Specifically, for broader institutional adoption, I see exchanges and data centers booming. I am an investor at Bitzero, a data center company that provides clean energy for BTC mining. My investment has a power play – it’s the cheapest power I’ve seen. They can mine BTC at a low break-even point and earn profits regardless of its volatility.
The exchange is similar. I invested a lot in Wonderfi. This has become the largest in Canada. I am also a shareholder of Robinhood and Coinbase. Such a platform is where price discovery occurs and is acquired on a per transaction basis.
Build a crypto portfolio
Buying this space today ranges from infrastructure play to stubcoin. I own currency, exchanges, and energy that powers them. Collectively, crypto-related investments are around 20% of my portfolio. We recommend building a diverse crypto portfolio by investing in companies that support digital assets rather than token varieties.
Where the coin belongs
At one point there were 27 code locations. Now I’m sure I only need three: btc, and stablecoins. BTC and ETH are gold standard, and together they are about 90% of my coin holdings. I like monthly yields so I wrap ETH around 2.5% and BTC respectively.
Many of my other investments, such as stocks and bonds, can pay dividends or interest. You can see your income. That’s what my wrapping strategy recreates, and while acknowledging BTC as digital gold, the fundamental point is long-term price rise. ETH, on the other hand, is where many Wall Street stubcoins trade.
Ministry of Finance and Leverage
We have recently seen the public company Treasury Department purchase BTC with large leverage. I’m conservative. I call it boring, but I use very little coins. It’s at most 30%. For me, if my BTC drops by 50% overnight, there’s no risk of getting burned.
Crypto investors’ thinking
If there’s one thing to understand about crypto investment, it’s that volatility is burned. Your thinking must be to take advantage of volatility and productivity by owning both cryptography and its infrastructure. Trust in the entire crypto space. This should avoid making money by predicting the price of your token.
– Kevin O’Leary, Entrepreneur and Investor
Ask the expert
Understanding the meaning of crypto investment models: what is the meaning of access in today’s markets
Q: What does “access” mean when investing in cryptocurrency? Why is that important?
A: Access is as follows how Investors are involved in the crypto ecosystem. In traditional markets, access is relatively uniform. Most investors use securities accounts to buy stocks or ETFs. In cryptography, the landscape is much more fragmented and dynamic. You can purchase tokens in centralized exchange, interact with decentralized protocols, invest in structured products, and allocate capital to professionally managed strategies.
Each access model has a clear meaning Ownership, management, implementation, transparency and risk. For example, holding tokens in a private wallet allows you to control your assets. However, technical know-how is also required. On the other hand, products like managed accounts or indexes offer simplicity and professional surveillance, but often reduce control.
Understanding the access model is fundamental. It shapes your entire experience and exposure to digital assets.
Q: What type of strategy can I use, besides buying and holding tokens?
A: Beyond purchasing and holding, digital assets support a variety of sophisticated strategies.
• Delta-Neutral: Balance between long and short positions (such as Spot vs Futures) to eliminate directional exposure. These strategies focused on yield generation usually experience minimal drawdowns and are attractive to steady returns.
• Market neutrality: Bring your net dollar exposure to zero by mispricing across assets. Methods such as statistical arbitration, pair trading, or basketball often aim for uncorrelated returns with drawdowns of less than 10%.
• Quantitative long short: Make directional bets using systematic signals such as momentum, mean return, and factor models. Designed for higher return targets, these strategies accept greater volatility and drawdown in the 10-20% range.
• Smart Beta: A rule-based framework that replicates factors exposure such as momentum, value, and volatility. It is often implemented through regulated futures, providing scalable and transparent access to the systematic style commonly found in traditional finance.
Together, these approaches broaden investors’ options beyond passive exposures, allowing them to have more accurate control over risk, returns, and diversification in their portfolio.
Q: How should someone choose the right approach to enter the Crypto market?
A: Start with investment goals: Are you looking for long-term growth, diversification, income generation, or capital conservation? From there, we assess both risk tolerance and prioritized engagement.
- Practical Investors If you’re familiar with the technology, you may want to consider direct token exposure or defi protocols.
- Allocators seeking structure and monitoring You may prefer managed strategies where AI-driven portfolio construction, real-time risk analysis, and automated execution provide a data-driven alternative.
Infrastructure is equally important. It defines the durability of an investment approach, for example, custody, liquidity, and transparency. For example, an unlawful architecture combined with real-time performance and risk dashboards can help ensure security, transparency, and control.
Today’s digital asset ecosystem includes a diverse range of participants, from convicted traders to passive investors. The key is not just Is it? Engage, but how Engagement – Align your access methods with goals and fully understand the trade-offs. This way investors can participate smartly, safely, and at a large scale.
-Leo Mindyuk, CEO & CIO, ML Tech