Those cautious about bitcoin warn that bitcoin is a market bubble and are concerned that the cryptocurrency's recent rally is reminiscent of retail investor speculation that led to the 2017 crash, but bitcoin bulls predict its volatility will stabilize.
Regardless of bitcoin's recent rise, "Shark Tank" investor Kevin O'Leary would not put his money into bitcoin, he said in a YouTube video published Tuesday.
"Bitcoin is a nothing-burger, a giant nothing-burger," said O'Leary, chairman of O'Shares ETFs, because "you don't have every institution willing to play ball with it."
For example, O'Leary pointed out that he cannot use bitcoin to "buy assets" globally, as regulators in different countries remain wary of the cryptocurrency. "I can't get consistency with any single regulator in endorsing bitcoin for me to do a significant transaction," he said. "It's getting better, but it's not something every regulator in every market [supports]."
Also, the process of transferring and converting bitcoin to fiat "isn't instantaneous," O'Leary said.
"If I want to buy a million dollars worth of bitcoin right now, I've got to do a fair amount of work to pull that off."
Indeed, most mainstream bitcoin transactions are done by converting bitcoin to fiat currency, and although the cryptocurrency has gained recent support from many large financial companies like PayPal and Fidelity, the process is time-consuming and clunky, according to fintech experts.
"[The] cost of transaction with btc/eth is very high," Cuban tweeted on Tuesday, referring to bitcoin and ether (the cryptocurrency for the Ethereum blockchain). But Cuban admits, "once you own it the cost of carry is near zero. Compared to a bank or other host [fees], the cost of your own 'wallet' is negligible."
Bitcoin bulls say this process will become easier and cheaper over time. (For instance, PayPal, whose customers will be able to use cryptocurrency as a "funding source" for purchases in 2021, says on its website that when a user "pays" with bitcoin, it "will be instantly converted to fiat currency" for the transaction with the site's merchant to be settled.)
Although O'Leary isn't sold on buying bitcoin, he does believe "there would be tremendous value in a digital currency" that is global. "If there was an attempt, [with] bitcoin itself or another currency, that could be traded everywhere with a regulator agreeing to it ... then you'd have something of tremendous value," he says. (Bitcoin supporters hope this will be the cryptocurrency's future outcome.)
If that existed, O'Leary would invest in it, he said.
"That way, I could keep half of my net worth in the digital currency and just flow. I could buy groceries, buy a house with it," he said. "That is a vision that is really attractive, versus this tiny little thing that, for some people, is an outlier and that in many ways isn't liquid or isn't easily liquid," he said, referring to bitcoin.
Disclosure: CNBC owns the exclusive off-network cable rights to "Shark Tank."