Celebrity investor Kevin O’Leary (aka “Mr. Wonderful” on ABC TV series “Shark Tank“) is predicting that a massive capitulation event is coming for the crypto market.
On July 6, during an interview on YouTube series “Meet Kevin”, O’Leary claimed that the crypto markets are in danger of a massive capitulation event that will trigger further panic among investors. O’Leary argued that the market has yet to reach a bottom, despite the collapse in prices over the past two months.
The Shark Tank investor also predicted that a “big guy” in the crypto industry would go to zero, which he called “very healthy” for the market.
As reported by the Daily Hodl, O’Leary said,
There’s no big guy who has gone to zero yet, and I think that’s still to come. Hard to say who it is because it’s going to be because of leverage and some kind of relationship in a counterparty holding that they have not disclosed, and I’m just speculating right now, but that would be very healthy for the market to have that happen.
O’Leary commented on crypto brokerage firm Voyager Digital, which filed on July 6 for Chapter 11 bankruptcy protection after having a large-capital borrower default on a loan. O’Leary said the firm was too small to constitute his “big guy” going to zero, and said other crypto companies that have failed so far were likewise “irrelevant” in terms of market cap.
O’Leary warned that the crypto markets could undergo a massive capitulation event in the near future that would create even greater uncertainty for investors. However, he gave the caveat that such an event would represent a great buying opportunity:
I like a big, big panic event. That’s always been a great way to bottom. It’s towel throwing. It’s capitulation. It’s massive volume. It’s total panic in the streets and always a great buying opportunity.
While the famed investor said it was difficult to predict when the event would happen, he argued that it would be a “very good thing for this industry.” He said a capitulation event would wipe out the broken business models and help the market unload its overly-leveraged speculation.