Kevin O’Leary Sees a Trillion-Dollar Crypto Rush If Congress Acts

• Kevin O’Leary, once a Bitcoin (BTC) skeptic, now allocates 19.4% of his portfolio to cryptocurrency assets, including coins, tokens, and stakes in platforms like Circle, and advocates for regulatory clarity to unlock a trillion-dollar institutional investment opportunity.
• The GENIUS Act, aimed at regulating stablecoins like USDC, could grow the market to $2.5 trillion, while the market structure bill seeks to define digital assets as commodities or securities, addressing key investor concerns.
• Bitcoin’s surge past $110,000 and Coinbase’s (COIN) inclusion in the S&P 500 reflect growing mainstream acceptance, but O’Leary emphasizes that clear regulations are essential to attract institutional capital and cleanse the market of low-quality assets.

Kevin O’Leary, the outspoken Shark Tank investor, has undergone a remarkable transformation in his stance on cryptocurrency, evolving from a skeptic who once labeled Bitcoin “garbage” to allocating 19.4% of his portfolio to crypto-related assets. This shift, as he shared with Moneywise, reflects not only his personal conviction but also a broader momentum in the cryptocurrency space, driven by rising prices, regulatory developments, and growing mainstream acceptance. O’Leary’s portfolio now includes direct investments in coins and tokens, as well as stakes in “picks and shovels” infrastructure, such as platforms and exchanges like Circle, the issuer of the USDC stablecoin. His enthusiasm for the sector was palpable during his keynote at the Consensus crypto conference in Toronto, where he underscored the urgent need for regulatory clarity to unlock the industry’s trillion-dollar potential.

The cryptocurrency market is riding a wave of optimism, fueled by Bitcoin’s surge past $110,000, a significant leap from its 2024 range below $70,000. This rally has been bolstered by a more favorable outlook under the Trump administration, which has shifted away from the “regulation by enforcement” approach of its predecessor. A key beneficiary has been Coinbase Global, Inc. (COIN), the largest U.S.-based crypto exchange, which saw its stock earn a coveted spot in the S&P 500 (SPX) index after the SEC dropped a lawsuit against it in February. The growing legitimacy of crypto is evident in its inclusion in retirement portfolios and the availability of Bitcoin and Ethereum ETFs, signaling a departure from its fringe status. However, O’Leary emphasized that institutional investors – such as sovereign wealth and pension funds – remain cautious, with only clear regulations capable of drawing their substantial capital.

O’Leary is actively advocating for two pivotal pieces of legislation to bridge this gap. The first, the GENIUS Act, focuses on establishing a regulatory framework for stablecoins, digital tokens pegged to fiat currencies like USDC, which O’Leary holds. Stablecoins, he argued in Toronto, could disrupt the multitrillion-dollar currency trading market, which he described as “old and ugly and inefficient” due to high fees charged by banks and credit card companies. By enabling faster, cheaper cross-border transactions, stablecoins could dismantle these inefficiencies, a prospect that has already caught the attention of Big Tech, with reports of Meta exploring partnerships in the space. Analysts project the stablecoin market could reach $2.5 trillion if the GENIUS Act, recently advanced in the Senate, is passed, despite criticisms from figures like Sen. Elizabeth Warren, who has raised concerns about potential conflicts of interest tied to Trump-backed firms.

The second piece of legislation, the market structure bill, aims to provide a comprehensive framework for digital assets, crucially defining whether they are commodities or securities. O’Leary predicted that its passage would unleash a “trillion dollars” in institutional capital, particularly into top-tier tokens like Bitcoin. This aligns with findings from a January EY and Coinbase survey of U.S. institutional investors, which identified regulatory uncertainty as the primary barrier to crypto investment. Specifically, 50% of respondents highlighted the need for clear custody rules, 49% sought clarity on commodity versus security classifications, and 46% emphasized tax treatment, with 26% prioritizing the regulation of stablecoins and tokenized fiat.

Despite the promise of these bills, O’Leary acknowledged that the crypto industry has “hit a wall” in expanding assets under management, with institutional capital still on the sidelines. He views regulation as a “dialysis” process that would cleanse the market of low-quality assets, channeling capital into the top five tokens and creating a “vortex” of investment. His push for regulation, a stance he never anticipated taking, underscores the industry’s maturation and the critical role of policy in unlocking its next phase of growth. As O’Leary navigates Washington to champion these reforms, the crypto market stands at a crossroads, with the potential to redefine global finance—if the regulatory pieces fall into place.

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