Exclusive: Kevin O’Leary weathers the crypto winter with political bets, Bitzero Investment – Bitcoin (BTC/USD), Ethereum (ETH/USD)

The United States Securities and Exchange Commission (SEC) is challenging carbon credits.

It depends Kevin O’Learywho discussed with Benzinga during filming shark tank. The renowned investor explains that an SEC-mandated “carbon credit audit” made publicly traded cryptocurrency miners far too risky for him.

This is what prompted a “dramatic decline” in their stock prices ahead of this year’s “silver price correction”. Bitcoin BTC/USD‘ he says. ‘Sovereign and pension schemes understood this straight away. Audit firms won’t sign offsets as there is no ledger for carbon credits – that’s BS to suggest that buying Acres from Amazon will make your Bitcoin mining operation clean.

With Bitcoin miners ‘in the penalty zone’ as demand for cryptocurrency mining and data centers is expected to continue to grow, O’Leary has sought to deploy funds into climate-focused operations .

“That’s when I met Akbar Chamji of Bitzer,” he says.

Shamji and Bitzero

Shamji is the founder, president and CEO of Bitzero, a developer of 100% renewable data centers. His experience in clean energy development dates back to his work advising governments on visionary plans for net zero emissions and carbon reduction plans.

“There were a lot of renewable energy development and generation initiatives, alongside Indian government policy, which we helped draft,” he says. “Challenges, however, included subsidies taken by big industry to develop coal-fired power stations to power their industry at night.

“Solar by day, coal by night” has generated amazing results for society and created a new middle class, Shamji said. Nevertheless, “temperatures rose and some people suffered”.

It inspired action against “the biggest beast that’s coming our way is data”, and ultimately took Shamji to Norway where he makes Bitzero one of the biggest miners because that’s where “temperatures are cold” and that infrastructure has been built to tap into “trapped power”.

“As soon as low voltage power was available, there we built a containerized Bitcoin mining operation with all containers performing better in hash output, per installed ASIC capacity, than anything on the global grid” , explains Shamji.

Having “proved the concept and generated revenue”, the Bitzero team is now looking to expand their model to new locations and applications like data centers, as well as using the heat generated to boost “farming and greenhouse agriculture.

Bitzer in the United States

Shamji took a moment to consider whether to work with O’Leary.

“Kevin took a long time to figure that out,” Shamji says of the joy his relationship with the O’Leary team has given him. However, “this is at the same time that Upstate New York announced a three-year ban on Bitcoin from doing an environmental study.”

This is, in short, bad news because “everyone is freezing, including investments,” says Shamji.

O’Leary quickly got to work on the political level, conferring with Republican leaders like senators Cynthia Lummis of Wyoming and Pat Toomey of Pennsylvania. He also spoke with the Governor of North Dakota Doug Burgumentrepreneur and philanthropist in his own right.

“In North Dakota, we found an incredibly forward-looking government with teams sitting atop a unique global geology around carbon capture and sequestration,” Shamji says.

O’Leary’s thesis

“Politics has a direct impact on investing,” says O’Leary.

Knowing that “the SEC calls BS on carbon credits”, via a “disconnect” on data centers, adaptable to mine Ethereum ETH/USD or service Alphabet Inc. GOOGL GOOG and Amazon Inc. AMZNit makes sense to invest in clean concepts like Bitzero, where returns can reach “14% in perpetuity”.

“You have to be where the puck is going, because Wayne Gretzky said,” O’Leary added. Bitzero’s investments are attractive because they are “cooperative and business-friendly government, clean energy, and unlimited customers who want access to it.”

O’Leary sees it as his duty to “promote entrepreneurs like Akbar who understand him, find capital for him, invest me and our own funds, and find the path of least resistance.”

Pyramid of Nekoma

Asked in more detail about Bitzero’s clean energy work in data centers and cryptocurrency mining, Shamji points to “The Pyramid” in Nekoma, North Dakota – an abandoned military facility in the US. Cold War era that is “nuclear and EMP proof”.

Bitzero recently agreed to acquire “The Pyramid” with the intention of turning it into a computing and data processing facility. The waste heat captured by the center’s servers would heat an on-site greenhouse.

“If a small bank or government agency needs a Tier 5 data center, but doesn’t qualify for the big national security stuff in Virginia,” they can come to Bitzero, Shamji notes. “There will be no shortage of customers.

The bunny and the turtle

Unlike competitors who are “burdened with machine debt” as well as expensive operating expenses, Bitzero is isolated.

“We are the winning turtle,” says Shamji.

Thanks to the use of facilities such as “The Pyramid”, the initial costs are high. However, when it comes to mining, the costs can be a third and the equipment will last for years if not “overclocked”.

This is part of the “win-win formula from a climate and business perspective”, adds Shamji. Upcoming capital expenditures are “heavy”, but lower operating expenditures make up for them.

Pro-Crypto Washington

O’Leary is optimistic about the policy coming from Washington. Policymakers on all sides are “pro-crypto, payments and stablecoins,” he says.

“The reason both parties would support stablecoins is that it would make the US dollar the default currency, globally. If a stablecoin backed by the US dollar and treasuries were regulated as a payment system, it could stimulate interest from “sovereign wealth funds and financial institutions”.

Until there is clarity on the political front, Bitcoin will likely remain under pressure.

“There’s no offer for that,” O’Leary concluded. “I’m encouraged that over the next 18 months we can have a policy, and I think that will be reflected well in the valuations of companies like Bitzero, especially those who know how to provide an ESG solution to great institutions.”

Benzinga would like to thank Nancy Cheung of O’Leary Ventures for hosting this conversation.

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