- O’Leary says Bitcoin’s next breakout depends on U.S. regulatory clarity, not market hype.
- He sold 27 crypto holdings, focusing only on Bitcoin and Ethereum for long-term exposure.
- O’Leary says nearly 97% of crypto returns come from BTC and ETH, leaving little room for others.
As crypto markets move deeper into 2026, Kevin O’Leary has a clear message for investors: Bitcoin’s real breakout will not come from speculation, but from regulation.
Speaking in a recent interview, the Shark Tank investor said he remains invested in Bitcoin and Ethereum, but expects limited upside until U.S. lawmakers deliver long-awaited regulatory clarity.
O’Leary revealed that he sold 27 crypto positions and narrowed his focus to what he called the industry’s core assets: Bitcoin and Ethereum.
He described the move as choosing the “two-girl dance,” a simple way of saying that, for serious capital, only two names truly matter. O’Leary also acknowledged Ethereum’s dominance, especially in stablecoins. He said that more than 70% of stablecoin transactions currently settle on Ethereum.
Regulation Is the Missing Trigger
O’Leary said he does not expect meaningful capital appreciation in Bitcoin until Congress passes comprehensive crypto legislation, often referred to as the CLARITY Act.
According to him, the biggest roadblock is how stablecoins are treated under current rules. Unlike bank deposits, stablecoin holders cannot earn yield in the same way, a gap he believes must be addressed before institutions fully step in.
“This needs to be fixed,” O’Leary said, adding that both Republican and Democratic lawmakers understand the issue and see it as a bottleneck holding the industry back.
Until that happens, he argued, Bitcoin remains outside the comfort zone of large institutions and sovereign wealth funds.
A Harsh Reality for Altcoins
One of O’Leary’s most blunt points focused on market structure.
According to analysis shared with him by index providers, nearly all of crypto’s returns can be captured using just two assets: Bitcoin and Ethereum.
He said roughly 97% of the market’s total alpha comes from BTC and ETH alone, making broad altcoin exposure unnecessary for institutions.
That reality, O’Leary argued, explains why many smaller tokens collapsed in late 2025 and failed to recover.
“No indexer is going to buy them,” he said. “There’s no added value, and the correlation to Bitcoin is too high.”
For large funds, simplicity matters. Managing dozens of tokens adds compliance and operational complexity with little benefit.
Related: DEX Volume Surges to Record Highs in January Despite Crypto Sell-Off
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