- Former U.S SEC Chair Gary Gensler has expressed his confidence regarding the long-term potential of Bitcoin in comparison to altcoins.
- While in office, Gensler was a tough regulator of the crypto industry, initiating multiple enforcement actions against exchanges and multiple crypto experts.
In his first public interview after stepping down as Chair of the U.S. Securities and Exchange Commission (SEC), Gary Gensler painted a picture of the health of the cryptocurrency market. In an interview for CNBC’s Squawk Box, Gensler was honest in his assessment of the digital assets world, creating a dramatic differentiation between Bitcoin (BTC) and the tens of thousands of tokens that followed in its footsteps since its launch in 2009.
Gensler didn’t mince words about the fate of the vast majority of altcoins. He explained, “If this is just about sentiment, then generally, those don’t end up well. And most of them go down.” It was a blunt assessment from someone who spent four years leading the charge against what he often described as noncompliant and risky crypto practices.
Bitcoin: The Outlier
Gary Gensler had intense regulatory scrutiny on crypto markets, likening Bitcoin to gold, a globally recognized and enduring store of value. “If you were interested in this,” he began, “think about every financial asset sort of trading on a bit of fundamentals and sentiment. But this field is almost 99%, or maybe one might say 100%, sentiment and very little on fundamentals.”
While acknowledging Bitcoin’s potential to endure, Gensler made it clear that the broader crypto ecosystem is far riskier. “Something like Bitcoin may persist for a long time,” he noted, citing global curiosity and cultural fascination. “There are seven billion people around the globe with a real keen interest in it.” But he cautioned investors to “think through your own risk, your own personal risk, where are the fundamentals?”.
Pressed by CNBC’s Andrew Ross Sorkin on whether Bitcoin is qualitatively different from other tokens, Gensler responded with a clear metaphor: “The distinction is similar to metals. There are only two or three precious metals. We humans have a certain fascination with two or three precious metals, like gold.”
His takeaway? The crypto space may see one or two tokens with enduring appeal, but the overwhelming majority are unlikely to stand the test of time. “I don’t think we humans will have a fascination with 10 or 15,000 memes or sentiment tokens trading over the years.”
Under Gensler’s leadership, the SEC ramped up enforcement efforts against several of the crypto industry’s biggest names. Lawsuits were filed against major players like Coinbase, Binance, SafeMoon, and Justin Sun, the founder of the Tron network, with charges centering around unregistered securities offerings, investor deception, and market manipulation.
Among the flurry of legal actions, the SEC’s high-profile case against Ripple Labs stood out as the most closely watched. Originally filed in December 2020, the case recently reached a resolution: the SEC officially withdrew its appeal, effectively bringing the long-running battle to a close.
When he was appointed in April 2021, Bitcoin was trading between $47,000 and $64,000, already off its early-year highs. Today, Bitcoin stands at $84,122, with a slight drop of 2.44% in its trading volume.
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