Kevin O’Leary predicts U.S. crypto law will land before midterms – despite months of delay
Kevin O’Leary believes the long‑awaited U.S. framework for digital asset markets is finally nearing the finish line. According to the investor, crypto market structure legislation that has been stalled and reshuffled for months is now close enough that he’s willing to put a date on it: he expects it to clear Congress by May 15, well ahead of the upcoming midterm elections.
Speaking in an interview on Friday, the “Shark Tank” personality and chairman of O’Leary Ventures said he is “hopeful” lawmakers will manage to push the bill through in time, arguing that the bulk of the real work is already happening behind the scenes. In his view, the momentum inside Washington has clearly shifted.
“These bills are written by staffers,” O’Leary noted, emphasizing that congressional offices have become heavily absorbed in the process. By his estimate, those staff members are now dedicating “probably 80% of their day” to finalizing the legislation, a sign that the bill has become a priority project rather than an afterthought.
Stablecoin rewards: the main sticking point
The single biggest obstacle, O’Leary argues, is the fight over how stablecoins can be used to generate returns. He says the disagreement around stablecoin rewards accounts for “about 90%” of the remaining uncertainty surrounding the bill, and is the primary reason it has taken so long to reach a vote.
At the core of the dispute is whether platforms should be allowed to pay yield on stablecoins that simply sit idle in customer accounts, as opposed to being actively used in payments or transactions. Some lawmakers and regulators worry that interest‑bearing stablecoins blur the line between banking products and simple digital tokens, potentially pulling retail users into riskier territory without the protections that apply to traditional deposits.
O’Leary has been particularly critical of any provision that would outright prohibit platforms from offering rewards on passive stablecoin balances. He warns that such a ban would distort competition and push innovation away from regulated U.S. entities.
In his view, restricting rewards would “tilt the playing field” in favor of jurisdictions that take a more permissive approach, encouraging capital and talent to leave the United States. He contends that if stablecoin products are transparent and well‑regulated, forbidding yield on idle balances does more harm than good by limiting consumer choice and undermining the country’s influence over a fast‑moving market.
A possible compromise: rewards for usage, not for parking
Industry voices have floated several compromise solutions. Galaxy Digital CEO Mike Novogratz has suggested a middle‑ground framework in which rewards are allowed when stablecoins are being used for specific activities—such as payments, settlements, or on‑chain services—but not when they are simply parked passively in user wallets.
Under that model, platforms could still incentivize real economic activity and adoption of blockchain rails, while regulators might feel more comfortable knowing that yields are tied to concrete, transparent use cases rather than opaque lending or leverage. It would also give policymakers an easier way to draw lines between payments, investment products, and quasi‑banking services.
O’Leary, for his part, remains convinced that some form of compromise will emerge. He expects lawmakers to eventually converge on a solution that allows rewards in at least some form, even if it ends up more conservative than the industry’s preferred version.
Coinbase’s last‑minute break and the delayed vote
The internal tug‑of‑war over stablecoins flared publicly when Coinbase abruptly pulled its backing for the bill shortly before a key markup session. The exchange had been one of the most prominent supporters of establishing clear U.S. rules for digital assets but walked away just hours before lawmakers were due to consider amendments.
CEO Brian Armstrong explained that the company wanted to preserve a “level playing field” and maintain customers’ ability to earn moderate yields—around 3.8%—on their stablecoin holdings. From Coinbase’s perspective, any framework that blocks or heavily restricts such returns risks cementing the advantages of traditional banks and non‑U.S. platforms at the expense of crypto‑native firms operating domestically.
The withdrawal of support effectively froze the legislative process. Without consensus among major industry stakeholders and with lawmakers already wary of appearing too generous to crypto firms, the markup was postponed indefinitely. The delay underscored how sensitive the debate over rewards has become and highlighted fractures within the sector itself.
Ripple and others still see a “massive step forward”
Not all industry leaders share Coinbase’s skepticism. Ripple CEO Brad Garlinghouse has praised the proposed legislation as a “massive step forward,” arguing that getting a comprehensive market structure bill in place is more important than achieving perfection in its first iteration.
Supporters with this view contend that once an initial framework exists, it can be refined over time as regulators and lawmakers better understand how the market evolves. They argue that the absence of law is the greater risk: companies remain exposed to ad‑hoc enforcement, investors face persistent uncertainty, and the U.S. continues to cede ground to regions that have already formalized their rules.
Garlinghouse and others have therefore urged policymakers and industry participants not to abandon the effort, even after the latest setback. In their reading, the bill represents a crucial foundation for legitimizing digital assets in mainstream finance, and delays only prolong the confusion that has dogged the sector for years.
From optimism to downturn: the “Trump trade” unravels
O’Leary’s legislative forecast is unfolding against a dramatically changed market backdrop. Just a year earlier, many traders and investors believed the second Trump administration would fuel a powerful, sustained bull cycle for digital assets. O’Leary himself lauded what he called a “new phase” for the industry as the White House signaled openness to Bitcoin and other cryptocurrencies.
Reality has been far messier. After early enthusiasm in 2025 for a more crypto‑friendly policy climate, digital assets tumbled into a deep bear market that erased most of the year’s gains by late 2025 and into 2026. Heightened macro stress quickly eclipsed any perceived regulatory tailwind.
Bitcoin peaked in October 2025 before reversing sharply. As global trade tensions escalated and fresh tariff threats injected new uncertainty into markets, volatility surged. Bitcoin frequently slipped below the 90,000‑dollar mark and is currently trading around 87,600 dollars, a stark comedown from its record highs.
The downturn marked a brutal end to what had been branded the “Trump trade” in crypto circles: the idea that a supportive administration would mechanically drive digital assets higher. When proposed 100% tariffs on China were floated in October 2025, many leveraged positions across the market unwound violently. By November, approximately 1 trillion dollars had been wiped from total cryptocurrency market capitalization, pushing the asset class back below where it stood at the start of the administration’s second term.
Macro headwinds overpower policy gestures
Analysts broadly point to a mix of trade uncertainty, lingering inflation fears, and elevated interest rates as core drivers of the ongoing volatility. Risk assets across the board have suffered, and crypto—still seen as high beta and speculative—has been particularly sensitive to each new macroeconomic data release.
Bitcoin has been flirting with a potential fourth consecutive monthly decline in January, underlining just how fragile sentiment remains. Each sign of tighter financial conditions, slowing growth, or renewed trade conflict has rippled quickly through the digital asset complex.
Policy initiatives have provided only modest relief. The administration’s moves toward establishing a strategic Bitcoin reserve and its early executive orders on digital assets were initially interpreted as bullish signals. However, these steps have so far failed to counter the impact of a broader risk‑off environment, in which investors are de‑leveraging and rotating into safer assets.
Even vocal crypto backers have pulled back. O’Leary, for example, disclosed that he liquidated 27 separate crypto positions amid the turbulence. For some observers, such actions reflect a necessary cleanup phase in a longer‑term bullish cycle, flushing out excess leverage and speculative excess. Yet in the short term, confidence remains shaky as market participants wait for evidence of a durable recovery.
Why legislation still matters in a bear market
The bitter irony for many in the industry is that serious progress on regulatory clarity appears to be arriving just as prices languish and trading volumes thin out. But for O’Leary and other institutional‑minded investors, that timing could ultimately be a positive.
Comprehensive market structure rules are widely seen as a prerequisite for major pension funds, insurance companies, and traditional asset managers to increase or even initiate exposure to digital assets at scale. Clear guidelines on custody, stablecoins, disclosure, and market surveillance could reduce perceived regulatory risk and make it easier for compliance teams to approve crypto allocations.
Moreover, passing such a bill during a downturn may make it more credible. Lawmakers can argue they are not simply responding to hype or bubble dynamics, but instead building guardrails in a more sober environment. In that sense, a bear market can be politically useful: there is less pressure to “ride the wave” and more space to craft stricter consumer protections.
If the legislation lands roughly on the timeline O’Leary projects, it could coincide with a period when valuations are still depressed, offering longer‑horizon investors a clearer, more regulated playing field at lower entry prices.
How stablecoin rules could reshape competition
The stablecoin section of the bill is especially consequential because it touches both retail products and the plumbing of digital finance. Depending on where lawmakers land, the U.S. could:
– Encourage banks and fintechs to issue compliant, well‑collateralized dollar tokens, potentially reinforcing the dollar’s dominance in global payments.
– Restrict or effectively outlaw certain yield‑bearing models, pushing higher‑risk experimentation offshore.
– Establish clear reserve, audit, and disclosure standards that differentiate reputable issuers from fly‑by‑night schemes.
If stablecoin rewards are heavily curbed but not banned outright, platforms may pivot toward more transparent, utility‑driven programs—rewarding users for spending, remittances, or on‑chain activity rather than for simple balance size. That could shift the industry’s focus from speculative hoarding toward real‑world usage, even if it reduces headline yield numbers.
Conversely, if policymakers approve a broader scope for passive yields under strict supervision, regulated entities could roll out competitive, bank‑like savings products powered by tokenized dollars. That scenario would likely accelerate the convergence between traditional finance and crypto infrastructure.
What investors should watch next
For traders and longer‑term allocators, several signposts will be critical in the months ahead:
– Legislative milestones – Committee markups, revised drafts, and any signs of bipartisan compromise on stablecoins will signal whether O’Leary’s mid‑May estimate is realistic.
– Industry alignment – Whether major players like Coinbase, Ripple, and large stablecoin issuers can find enough common ground to present a unified front will influence lawmakers’ confidence.
– Macro trajectory – Shifts in inflation data, rate expectations, and trade negotiations will still dominate price action, regardless of regulatory headlines.
– Institutional behavior – Announcements from asset managers, banks, and corporates about new crypto products or balance‑sheet exposure after any bill passes will show whether the promised “wall of institutional money” is finally materializing.
If legislation is delayed yet again, uncertainty will continue to weigh on both U.S. businesses and global investors assessing American regulatory risk. If it passes roughly on schedule, the industry will pivot quickly from speculation about rules to adapting business models to them.
The bigger picture: regulation as a turning point
Beyond short‑term market moves, the coming law is likely to serve as a structural turning point for digital assets in the United States. It will help define which business models are viable, which products are allowed for retail users, and where the line is drawn between securities, commodities, and payment tokens.
For O’Leary and many others, that clarity is overdue. The combination of aggressive enforcement actions and a lack of explicit statutory guidance has left companies guessing and has pushed innovation, liquidity, and jobs abroad. A formal market structure bill, even if imperfect, would mark a shift from rule‑making by enforcement to rule‑making by legislation.
Whether the final text fully satisfies any one camp is almost beside the point. The greater question is whether it provides enough predictability for the next wave of builders and investors to commit capital with confidence. In that sense, the real importance of O’Leary’s May 15 prediction is not the exact date, but the notion that, after years of drift, the U.S. may finally be on the verge of telling the crypto industry what the long game looks like.