Why Is Crypto Crashing? Kevin O’Leary and Raoul Pal Reveal Major Reasons - Coinpedia
The crypto market continues to struggle with Bitcoin and other digital assets facing persistent pressure due to slowing US liquidity and regulatory uncertainty, according to experts Raoul Pal and Kevin O'Leary.
The cryptocurrency market is failing to regain momentum as Bitcoin and other digital assets face continued downward pressure. Two major concerns are weighing on the market: slowing US liquidity and regulatory uncertainty, according to Real Vision founder Raoul Pal and investor Kevin O'Leary.
Liquidity Shortage Hurting Crypto
Raoul Pal identifies slowing US liquidity as one of the primary reasons for the crypto market's weak performance. He notes that US liquidity has remained largely flat since July 2026, with a stronger dollar, rising interest rates, and a flatter yield curve slowing money creation through the banking system.
Markets have gone nowhere. Narrow liquidity, so this is total liquidity including the banking system loans and leases. It's not growing as fast.
Pal explains that crypto needs increasing liquidity to support price growth, but current conditions aren't providing enough support. Despite the market downturn, he continues to buy crypto, making two purchases in 2026 including one during the February sell-off.
Pal believes Bitcoin remains undervalued based on its long-term liquidity trend and expects the US dollar to weaken toward 93 on the dollar index. He forecasts that lower interest rates and a weaker dollar could improve market conditions and support crypto prices. He also remains positive about Ethereum and Solana, outlining a scenario where Ethereum could reach $18,000 by Q2 2027 and $60,000 by mid-2028 if its trend continues.
Regulatory Uncertainty Stalling Adoption
Kevin O'Leary points to regulatory uncertainty in the US as another reason the broader crypto market is struggling. He believes businesses are hesitant to adopt blockchain services and stablecoins due to the lack of clear regulatory guidelines, with the delay in passing the CLARITY Act adding to this uncertainty.
We really need to get that done.
O'Leary explains that his holding companies already use USDC for treasury management and cross-border payment settlements, but many other businesses are waiting for approval from their compliance departments before adopting similar services. He notes that while the GENIUS Act has established a legal framework for stablecoins, broader rules covering blockchain infrastructure and other crypto services are still missing.
According to O'Leary, this regulatory uncertainty is slowing institutional adoption and limiting the wider use of blockchain technology. The market may see improvement if regulatory frameworks become clearer and if the dollar weakens as Pal predicts, but for now, these factors continue to suppress crypto growth.
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