Gary Gensler Slams Crypto Fundamentals, Endorses Bitcoin

Former SEC Chair Gary Gensler has recently reiterated his skepticism toward the broader cryptocurrency sector, sharply criticizing the fundamentals of most digital assets while making a notable exception for Bitcoin.

Gensler claims that the vast majority of cryptocurrencies are driven almost entirely by sentiment rather than any solid economic fundamentals. He described the field as “99 or maybe one might say 100% sentiment and very little on fundamentals,” warning that most tokens lack lasting value and are prone to decline over time.

He singled out Bitcoin as an exception, acknowledging its persistence and unique appeal. Gensler compared Bitcoin’s status to that of precious metals like gold, suggesting that while most cryptocurrencies resemble fleeting “meme or sentiment-driven assets,” Bitcoin may have more enduring qualities.

Gensler has repeatedly emphasized that Bitcoin accounts for the majority of the crypto market’s value and is widely recognized by the public, setting it apart from the thousands of other projects he thinks will not survive.

He has also warned about the prevalence of “pump-and-dump schemes” and bad actors in the crypto industry, further questioning the legitimacy of most tokens outside Bitcoin.

Despite the SEC’s approval of spot Bitcoin ETFs in January 2024, Gensler stressed that this did not constitute an endorsement of Bitcoin itself. He cautioned investors about the risks associated with both Bitcoin and other crypto assets.

Gensler maintained that the SEC remains “merit neutral” and does not take a view on the investment merits of Bitcoin or any other digital asset, but he has consistently stated that the vast majority of crypto tokens should be regulated as securities.

He has drawn a clear regulatory distinction between Bitcoin and other tokens, routinely acknowledging that Bitcoin is not a security, while asserting that most other cryptocurrencies do fall under the SEC’s jurisdiction as investment contracts.

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