Canadian businessman Kevin O’Leary believes the next phase of crypto adoption rests entirely on the U.S. Clarity Act, which he says will unlock institutional allocation but only for Bitcoin (BTC) and Ethereum (ETH).
In an interview with Yellow.com, he argued that compliance constraints leave no room for broader diversification once the doors open.
And when they do, he believes the outcome is already predetermined.
“When large institutions run the data, they’re going to arrive at the same conclusion we did, you capture the overwhelming majority of crypto’s long-term returns with Bitcoin and Ethereum,” he said. “There’s no incentive for them to hold anything else.”
The Clarity Act is a bipartisan proposal in Congress aimed at finally defining when digital assets are treated as securities or commodities, ending the ambiguity that keeps institutions on the sidelines.
A Consolidation Toward Two Assets
O’Leary said his own team analyzed more than two dozen tokens and found that over 97% of the portfolio’s historical performance could be replicated by a 50/50 mix of BTC and ETH.
Based on that, he exited every other position, including Solana (SOL).
The implication, in his view, is that institutional portfolios will treat cryptocurrencies no differently from other asset classes and they will allocate to the most liquid, deepest markets, and ignore the rest.
O’Leary believes this consolidation began during the recent drawdown, where many smaller tokens suffered permanent losses while BTC and ETH regained relative strength.
He framed this shift not as a judgment on technology, but a reflection of how real asset allocators operate. Institutions, he said, require liquidity, transparent pricing, and regulatory clarity, conditions that only Bitcoin and Ethereum currently meet at scale.
Stablecoins Are Already Transforming Payments
While Bitcoin and Ethereum will absorb future investment flows, O’Leary argued that stablecoins are the biggest practical breakthrough in the market today.
He said the GENIUS Act and similar frameworks abroad have made it possible for regulated institutions to use stablecoins for cross-border transfers, making them a legitimate alternative to traditional payment rails.
O’Leary said his companies have already replaced many international wires with stablecoin transactions, citing speed, cost efficiency, and legal clarity.
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“It’s now completely compliant to move capital between jurisdictions using stablecoins and settle back into local currency on the other side,” he said.
He expects stablecoin adoption to accelerate before most other forms of blockchain-based finance, largely because it fits within existing compliance structures.
Mining And Infrastructure Become the Institutional Play
O’Leary also highlighted the shift toward infrastructure as the more durable investment theme, particularly power providers, data-center operators, and miners with ultra-low electricity costs.
He said the economics of Bitcoin mining only work below six cents per kilowatt-hour, making power access the real competitive advantage.
His investment in Bitzero, he noted, was based on its ability to secure long-term contracts below that threshold.
He positioned this sector as a crossover point for two industries evolving in parallel, that is, AI compute and digital assets. Operators that control power, land, and fiber now sit at the intersection of both.
No Major Market Breakout Until Regulation Arrives
Despite long-term optimism, O’Leary said he does not expect a major price dislocation in the near term.
With the market waiting on regulatory clarity, he believes Bitcoin will trade within a defined range until institutions gain formal approval to allocate.
The catalyst, in his view, remains singular.
“The Clarity Act is the turning point. That’s when the meaningful capital comes in.”
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