'Shark Tank' star Kevin O'Leary has changed his mind on bitcoin - saying ETFs have drawn him to the asset he once called 'garbage'

• Kevin O'Leary once called bitcoin "garbage" but now plans to invest 3% of his portfolio.
• He said the arrival of bitcoin ETFs was a "gamechanger" that lets institutions get involved.
• O'Leary said he was focused on holding bitcoin sustainably.

Kevin O'Leary no longer thinks bitcoin is "garbage."

The "Shark Tank" star is now planning to put 3% of his portfolio into the world's biggest cryptocurrency, saying bitcoin ETFs and inflation worries have prompted a change of heart.

Canadian and other regulators allowing bitcoin exchange-traded funds is a "game-changer", because it allows "institutions and individuals alike to allocate" money to bitcoin more safely, O'Leary told Stansberry Research on Tuesday.

O'Leary said he plans to allocate 3% to bitcoin, in part because he sees it as a hedge against inflation. "The concern I have right now in the US market is a $1.9 trillion-, basically free-money helicopter, out of the sky, into the economy," he said.

"How do I hedge myself against that?" the O'Shares ETFs boss asked. "If the regulator is now opening up to allow me to allocate to crypto, why not?"

It is a major reversal of O'Leary's previous position. Only in January he called bitcoin a "giant-nothing burger" and said he wouldn't invest in it. In 2019, he went so far as to call bitcoin "garbage" and a "useless currency."

On Tuesday, O'Leary told Stansberry's Daniela Cambone: "When facts change, I change."

The TV star and businessman is not the only one to have been sucked in by bitcoin's meteoric price rise, with Elon Musk's Tesla and business technology company MicroStrategy both allocating large amounts of cash to the cryptocurrency.

On Sunday, Fidelity Investments' director of global macro Jurrien Timmer said in a note he thought bitcoin has "gone mainstream." He also said he thought bitcoin could be a good store of value if inflation erodes the purchasing power of other currencies.

O'Leary said he was concerned by bitcoin's massive energy consumption, however, and said he was in discussions with miners to make sure he could invest sustainably.

Despite some investors' enthusiasm, many argue that bitcoin's volatility means it is an inappropriate addition to a portfolio and useless as a means of transaction.

Will Hobbs, CIO Barclays Wealth & Investments, told Insider in February bitcoin is "multiples more volatile than our most white-knuckle-ride asset class, which is emerging-market equities."

Bitcoin traded at around $51,300 on Wednesday morning, taking year-to-date gains of more than 70%.