Entrepreneur and Shark Tank star Kevin O’Leary just faced off with Morgan Creek Digital co-founder Anthony Pompliano on CNBC’s Fast Money over the future of Bitcoin.
When questioned by O’Leary about the amount of Bitcoin in his portfolio, Pompliano confirmed that more than 50% of his net worth is in the world’s most popular cryptocurrency. O’Leary, who has emerged as a prominent crypto critic, was not impressed.
“I forbid that. That’s insane. That breaches everything about diversification investing. That’s crazy.”
O’Leary says putting that much money into any single asset violates the principles of diversification. The Canadian businessman recommends investing only up to 5% in any one company’s stock. He adds,
“I teach this stuff. You never go beyond concentrations of that nature. 50%? Shame on you. That’s nuts!”
Putting the size of the allocation aside, Pompliano says at this point it’s “irresponsible” for financial institutions to not have exposure to BTC.
“We are now entering a position where it’s irresponsible for institutions to not have exposure to this asset. And the reason is, their job is to find assets that actually can provide non-correlation to the markets.
Especially in times of global instability where there’s likely to be market drawdowns. Bitcoin is providing that. It’s just data. It’s math. It’s not personal opinion, it’s not somebody else’s opinion. The math suggests that it is non-correlated-to-negatively-correlated to major asset classes.”
— Squawk Box (@SquawkCNBC) August 6, 2019
On Monday, Pompliano emphasized the risky nature of investing any amount of one’s portfolio into Bitcoin in a tweet to crypto enthusiasts.
“Important message as we enter the next Bitcoin bull market:
BTC is very volatile. You can lose all of your money. Only invest what is ok to lose. Twitter is not investment advice. Don’t buy BTC with credit cards. Keep low time preference. Do your own research.”