Bitcoin yield is gaining traction among investors looking to earn passive income and also boost returns beyond price gains.
Now advocates may say yield improves capital efficiency and attracts institutional money while helping to grow the crypto ecosystem, but critics warn that yield strategies can put investors at risk of losing.
Bitcoin and conflict with Bitcoin's core principles of decentralization and security and also face uncertain regulatory challenges.
Well joining me live is Kevin O'Leary, chairman of O'Leary Ventures.
Kevin, great to have you back on.
Thank you so much for joining me.
So tell us, is Bitcoin yields a smart move or a risky bet?
I think the challenge we've got is as Bitcoin becomes more adopted in alternative portfolios, institutional portfolios considered by some as digital gold, as you well know, during the periods, sometimes they can be quite long of price volatility and of course stability where it stays flat for months on end or gets in a very tight trading range, is how do you make that productive in your portfolio and so I have the same challenge.
I mean, If you actually talk to crypto investors and ask them what are your largest holdings, the Granddaddy is always Bitcoin, and then #2, always Ethereum.
And if you take those two positions and you chart them against volatility of the entire crypto market, they capture over 95%.
Of the upside and downside falls, so you start to ask yourself why do I own anything else when I can have two core positions and basically capture all of the price volatility in both directions, obviously, and if I do own those giant positions, why can't I garner some kind of distribution, some kind of yield, or as I like to call it, some kind of royalty.
And within my own shop in the last 6 months we've began working on that and it's not as easy as you think, but it's certainly doable and it's been very fruitful.
And so yes, we own these positions, but every month I get a check.
I love that.
Well, Kevin, some believe that yield strategies undermine Bitcoin's focus on decentralization, security, and self-sovereignty.
So what do you say to that?
You don't have to have a decentralized strategy or centralized strategy.
What you have to have basically you're going back to the original financial services.
In some cases you're writing calls or you're writing derivatives or you're wrapping it, and these are all different strategies that the average person can't really do or shouldn't do if they don't understand because there are risks.
The whole idea is you've basically got about 7 different ways to garner yield off Bitcoin.
And you have more optionality if you combine it with Ethereum.
Now the reason you want both is Bitcoin, if you believe it, not everybody does, is an alternative asset no different than gold.
So I have a 5% weighting in gold.
Why wouldn't I have a 5% weighting in Bitcoin?
It's they both serve me well, but Ethereum is part of two different trends that are occurring at cutting edge right now.
Wall Street's going on chain.
It's going on the blockchain.
We know that the administration and policy is moving towards tokenization.
And we've also just passed the Genius Act for stablecoins.
So where is all of that occurring?
Most of it, or the bulk of it, or a lot of it happens on Ethereum.
And so that's why you've seen price appreciation.
When you flood the market with stablecoins that are now legal, you're going to find a lot of those transactions occur on Ethereum.
And so they have both performed very, very well because of the mega trends.
And then there's a third trend which nobody's even talking about but certainly getting on my radar.
Where does AI fit on this?
Where do you combine crypto with AI, and that's going to happen on chain.
And there's another argument for why you'd want to have a portfolio.
I mean, you could just start with a 50% Bitcoin, 50% Ethereum, nothing wrong with that.
Or if you were managing it internally or you're letting an external manager do it, they would balance that.
But the key is what are you getting for it?
And for me from now on.
I'm getting a check every month.
That's the way I view it, and that's what I'm doing.
So that means I have to hire a team to do this, but it's a big enough asset class for us now that it's worth having it internally managed.
Not everybody's going to do that.
I am.
Well, Kevin, I know we're limited for time here, so I do want to squeeze in the housing market here in the US as well as bus.
Now record revenue for Popart in the first half of 2025 for that company, and we know the too plushies seem to be the latest craze here.
So on the earnings call, Popart CEO Wang Ning teasing many Lebubus for smartphones.
So tell us why the appeal here and are you keeping your personalized Lebubus?
Well, I mean, you're talking about the Walmart numbers that just came out this morning.
Is that what you're concerned about?
Uh, so we're talking about the Popart numbers that came out for the parent company of Lebubus.
Oh, I see.
Sorry, I thought you said Walmart.
Solobubu, here's my lobubu.
Very proud of it.
Got it on the set of Shark tape.
Didn't know much about this market till recently.
This is the collectibles market.
This is a Louis Vuitton collectible of boba.
There's been about 7 women in the last week that saw this hanging off my man purse that have come to me and said, I have to have it.
Please sell it to me.
Apparently these things are impossible to get.
This particular one has gone stratospheric because it's collectible.
The real issue here for investors like me is what does this tell me about alternative asset classes.
I mean, I love my labubo and I'm not selling it to anybody.
It's just a real conversation starter, but I went back and started looking at the collectibles market for the last 8 years' data.
And the one that really knocked me out was collectible sports cards.
I don't know if you've seen what's happening at auction or in these private trades.
About $380 to $400 million a month of cards trading, and these are baseball cards or You know, F1 cards or basketball cards.
They're trading for a million dollars, $2 million.03 million dollars, $4 million and it reminds me so much of what was happening in modern art and contemporary art 20 years ago.
So I called the auction houses and I said, Are you watching these trends?
And they said, Oh yeah, this is for real.
This is called the hobby.
And fathers and sons have been doing it for 50 years in America, except now they've become collectible.
That market really intrigues me.
It sort of captures what this Lobubu vibe is all about, except you can see there's a there's a platform called Cardladder.
You're going to find cards on there for millions of dollars that are appreciating in some cases better than the S&P 500.
That sounds like to me an alternative asset class, and I love to find those early.
And I have to be honest with you, it was 3 years ago, um, when I met the guys from Fanatics on the set of Shark Tank, Michael Rubin, and, um, he told me I should get into the card space.
I thought it was a joke.
I was wrong, he was right.
And now he's turned this into almost a billion dollar business, so I'm really intrigued with that.
Watch for this asset class.
Next time we talk about it, I think I'll be far deeper into it.
I've just, I finished the research on the last 8 years' worth of data.
Stunning, stunning.
It's not flash in the pan.
Well, Kevin, I envy you because I'm still on the hunt for my first Lebubu.
Perhaps I can get in on this craze when the smarter the smartphone version comes out for Lebubus.
But finally, before I let you go, all eyes are on Fed rates.
Yeah, Kevin, you're lucky.
I really envy you, so.
Yes, you're lucky.
And finally, before I let you go, I do want to ask you about the housing market here in the US.
So how far do your mortgage rates actually need to fall in order to unfreeze the housing market here in the US?
They would have to drop to about 5.5%, 5.25%.
The chance of that happening is 0%.
I think the Fed is going to have a very hard time making any adjustments in September, and I'll tell you why.
They would be saying, remember, inflation right now is at 3%.
Their mandates 2.5%.
We haven't had the full effects of tariffs come through yet because companies are holding back, including companies like Walmart and Target and the automotive companies.
So the Fed's got to be worried about inflation creeping into the consumer side.
But if all of a sudden they were to do a large rate cut, more than 50 basis points, which the administration wants, and they're never going to get.
You would have them admitting essentially that our new target rate for inflation is 3% and we're going to be a combative now.
It's not.
It's 2.5%.
And so I don't see the possibility of any major cut at all, if anything, 25 basis points, but I don't even think that's on the table.
I mean, you could have said last week it was a 90% probability this morning it's an 80% probability.
Why?
Because the data remains hot.
That's the problem.
Now we have another CPI before the meeting, so things could change.
I don't think so.
I think every day inflation creeps in through tariffs when companies finally push some portion of that hit onto the consumer.
The housing market is going to be stuck with these 7% mortgages for quite a while, I think, and the days of the 3.75% to 4% mortgage gone for the rest of your life.
Well, Kevin, we will have to leave it there, but come back to the New York Stock Exchange and make sure to bring your Lebubus.
Thank you so much for joining me today.
I will bring my Lebubu.
I guarantee I'll still have it.
Love this thing.
Well, thank you so much, Kevin.
Talk to you soon.
