EXCLUSIVE: Kevin O'Leary Says There's No Reason To Get Excited About Bitcoin ETF Without Regulatory Clarity

"Shark Tank" investor and O'Shares ETFs Chairman Kevin O'Leary says all of the sovereign wealth funds and institutions are ready to buy Bitcoin BTC/USD, but there's nothing to get excited about until the market has more regulatory clarity. 

What To Know: Monday at the Benzinga Fintech Deal Day & Awards, O'Leary said we need more regulatory clarity before we start really getting excited about a Bitcoin ETF. 

"There's not going to be any Bitcoin ETF until there is an exchange that is compliant with the SEC," O'Leary said. 

Coinbase Global Inc COIN is the leading candidate for compliance, but right now they're stuck in litigation, he said. 

A potential Bitcoin ETF needs a transparent and compliant exchange to confirm the spot market pricing daily, the "Shark Tank" shark said. We aren't going to see a spot Bitcoin ETF until this issue is resolved, O'Leary said, adding that he doesn't think SEC Chair Gary Gensler is as flexible as people think he is. 

He suggested that a spot Bitcoin ETF could still be more than a year-and-a-half away, as Gensler is set to remain in his role for another 18 months, O'Leary said. 

The good news is that when approval does come, demand for Bitcoin is going to be really high, O'Leary told the Benzinga conference.

When asked about the private conversations he's had with institutions and large organizations about Bitcoin, he indicated that "all of them" are ready to buy Bitcoin — and only Bitcoin. 

"They aren't interested in the 10,000 token story. Bitcoin is proving itself to be liquid enough, it's proving itself to be a storage of wealth, most people consider it a commodity," O'Leary said. 

Check This Out: Bitcoin's Millionaire Club Expands: Wallets with $1M+ Balances Triple in 2023

Institutions need compliance with the SEC and they need to figure out how to deal with 24/7 trading of the asset, he said. 

On the compliance front, Gensler isn't convinced that Bitcoin is a commodity. O'Leary said that he's indifferent to what Gensler ultimately determines as long as he decides that it's compliant. 

24/7 trading also creates challenges for institutional buyers, because they generally limit exposure to any one asset class to 5%, O'Leary said. With equities, it's easy to rebalance daily because the markets close at 4 p.m. ET every day. 

If Bitcoin jumps 20% and an institution already has 5% exposure, that institution is going to have to sell down the position in order to remain compliant with its own mandates, he said. The logistics of this still need to be worked out because the market for Bitcoin never closes, he said. 

$BTC Price Action: Bitcoin was down 1.03% over the last 24 hours at $36,748 at the time of publication, according to Benzinga Pro.

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