Investor Kevin O'Leary recently stated that large Wall Street institutions are waiting for a clear regulatory framework from the US Congress before diving into tokenization of assets like Bitcoin (BTC). Tokenization—creating blockchain-based digital versions of stocks, bonds, and funds—is touted for improving transaction efficiency and lowering costs. But O'Leary stressed that legal uncertainty keeps big money on the sidelines.
Regulatory Clarity Is the Hard Requirement
O'Leary said that for the biggest players in finance, engaging with digital assets remains too risky and ambiguous as long as legal hurdles persist. He highlighted that a comprehensive digital asset bill passed by Congress could transform the industry. While tokenization advocates believe the technology could streamline settlements and cut fees, institutional capital won't flow heavily without a regulatory green light.
Stablecoin Legislation Accelerates Institutional Entry
O'Leary cited the recent passage of the GENIUS Act in the US as an example of how stablecoin innovation spreads quickly where regulation exists. Under new guidelines, stablecoins already deliver speed and cost advantages for cross-border payments. “Instead of waiting three days, we can now complete transactions in just minutes, at much lower cost, with full compliance and transparency,” he explained. He also noted that Bitcoin and Ethereum dominate the market's total value, while smaller crypto assets face considerable challenges amid market turbulence.
Institutional Portfolios Concentrate: 97% in BTC and ETH
According to O'Leary, institutional investors have significantly narrowed their crypto focus, with roughly 97% of sector value now in large-cap assets like Bitcoin and Ethereum. Demand for smaller, speculative tokens has dropped sharply. Looking ahead, he sees the biggest opportunity in major corporations standardizing their infrastructure, using blockchain platforms for logistics and contract management.
Energy and Infrastructure May Surpass Crypto Value
O'Leary predicted that the most valuable assets in the blockchain and AI landscape could soon be infrastructure, energy, and data centers. The underlying systems powering digital assets are gaining importance over the cryptocurrencies themselves. “Energy may soon become more valuable than Bitcoin itself,” he remarked, signaling a shift in focus toward core infrastructure.