Prominent investor Kevin O'Leary recently highlighted the critical importance of owning energy infrastructure within the cryptocurrency landscape. He contends that, at the appropriate cost, electrical power can be more valuable than Bitcoin itself until the digital currency achieves full regulatory status and its market price significantly increases, potentially reaching $150,000 to $200,000.
O'Leary shared insights from an interview, elaborating on how Bitzero, a Canadian energy firm where he is a strategic investor, leases power for high-performance computing and Bitcoin mining. He emphasized that direct control over infrastructure and energy resources provides a strategic advantage, allowing entities to either lease power or engage in Bitcoin mining, both proving beneficial. According to O'Leary, Bitzero's cost to mine a single Bitcoin is a mere $56,000, which is substantially lower than the prevailing market rate.
“Mr. Wonderful” further explained that the profitability of Bitcoin mining is intrinsically linked to access to inexpensive electricity. He reiterated that until Bitcoin establishes clear regulatory frameworks and climbs to a valuation between $150,000 and $200,000, the primary method of value capture lies in controlling the energy inputs. Furthermore, O'Leary expressed skepticism about altcoins, suggesting they lack institutional attractiveness and predict that institutional investors will divest from them once the CLARITY Act is enacted.
This is not the first instance where O'Leary has underlined the strategic advantage of owning the foundational infrastructure that underpins cryptocurrencies. He has a track record of investing in companies like Circle Internet Group Inc., Coinbase Global Inc., and Robinhood Markets Inc., which are integral to the cryptocurrency ecosystem. O'Leary has previously stated that holding only Bitcoin and Ethereum offers sufficient exposure to capture the majority of the crypto market's volatility and returns, viewing other altcoins as less viable, especially after market downturns due to their perceived lack of practical utility.
In summary, Kevin O'Leary advocates for a strategic focus on energy infrastructure in the cryptocurrency space, arguing that its ownership provides a more tangible and profitable asset than Bitcoin itself until the digital asset achieves significant price appreciation and clear regulatory guidelines. He believes that low-cost energy is paramount for profitable mining operations and that the future success of Bitcoin hinges on such regulatory clarity, which will also influence the appeal of other digital currencies to institutional investors.