Former SEC Chair Gary Gensler issued a stark warning to investors, declaring Bitcoin the only cryptocurrency with legitimate standing while dismissing thousands of altcoins as speculative gambles lacking fundamental value.
Former SEC Chair Gary Gensler issued a stark warning to global investors during a Bloomberg interview, singling out Bitcoin as the only cryptocurrency with legitimate standing while dismissing thousands of other digital tokens as dangerous speculative gambles.
Gensler framed the crypto market as a ticking time bomb of volatility, emphasizing that beyond Bitcoin and dollar-backed stablecoins, most tokens lack fundamental value drivers. His comments arrive as markets witness intense trading action, with short sellers getting squeezed and institutional dynamics shifting rapidly.
Bitcoin Stands Apart While Altcoins Face Scrutiny
The former regulator drew a sharp dividing line between Bitcoin and the broader altcoin universe. He stressed that thousands of tokens offer no dividends, no returns, and no underlying fundamentals to justify their valuations.
"Putting aside Bitcoin for a minute, all the thousands of other tokens, not the stablecoins that are backed by U.S. dollars, but all the thousands of other tokens, you have to ask yourself: what are the fundamentals? What's underlying it?" Gensler stated during the interview. He emphasized that investors must understand these risks before entering volatile crypto markets.
The distinction reflects long-standing regulatory interpretation. Bitcoin receives treatment more comparable to commodities like gold, whereas most altcoins resemble securities sold as investment contracts with promises of future profits from centralized teams. Under U.S. law, such assets should face disclosure and registration requirements that many have avoided.
Gensler referenced recent trading disruptions at the Chicago Mercantile Exchange, noting that as cryptocurrencies become more entwined with traditional markets, risks of systemic instability increase.
The Thanksgiving data center outage lasted approximately 10 hours after cooling system failures, though he downplayed immediate concerns about systemic impact.
Markets Reject Four-Year Cycle Theory
According to CoinMarketCap on X, Grayscale's research team is challenging conventional market wisdom. The firm rejects the notion that Bitcoin faces an imminent prolonged bear market, arguing the traditional four-year cycle has ended and projecting new highs could emerge in 2026.
Market analyst ArdiNSC posted on X that massive buying pressure continues flooding the tape. "The short squeeze continues. Look at the Delta in the bottom panel. Massive green buy pressure flooding the tape and forcing shorts underwater," ArdiNSC wrote. The analyst noted that Bitcoin punched vertically through liquidity bands around $91,000, with resistance sellers getting overwhelmed.
The technical analysis revealed that as long as Delta stays green, traders should not fade the velocity of the move higher. Short positions that attempted to cap price above $91,000 are now being consumed to fuel the upward momentum.
Bitcoin recently rebounded toward $92,000 following turbulent market conditions. The recovery came after Monday's turmoil when Japanese rate-hike expectations triggered global bond selloffs and amplified cryptocurrency declines.
Centralization Paradox Emerges Through ETFs
Gensler acknowledged an ironic development in crypto's evolution. The sector born from decentralization principles has moved toward centralized structures, particularly through exchange-traded funds.
"Ever since antiquity, finance goes towards centralization," he observed. The comment highlighted how an ecosystem designed for peer-to-peer transactions has become integrated with traditional financial infrastructure.
Bitcoin ETFs now enable investors to gain exposure through regulated products from BlackRock, Fidelity, Grayscale, VanEck, and Bitwise. This mirrors how investors access commodities like gold and silver through exchange-traded funds.
The shift carries significant implications for market dynamics. Not every trading firm maintains identical connectivity to backup data centers, affecting liquidity during infrastructure issues. Institutional investors may experience reduced liquidity when markets switch between primary and backup facilities.
Markets responded positively across digital assets during the recent recovery. Ethereum climbed 8.3% to $3,040, while XRP gained 7.6% to $2.18. Total crypto market capitalization rose 6.5% to $3.22 trillion.
The improvement followed Monday's chaos when regional market pressures created cascading effects. Japanese government bond movements remained subdued on Wednesday, though yields stayed under pressure as markets priced potential Bank of Japan tightening actions.
Gensler dismissed suggestions that crypto has become a partisan political issue. He emphasized the discussion should focus on fair capital markets where all investors receive equal treatment and access to information. "It's about our capital markets. The US has the greatest capital markets and they benefit from commonsense rules of the road," he stated.
The former SEC chair highlighted that when buying stocks or bonds, investors expect various information disclosures and equal treatment regardless of portfolio size. This fairness principle remains crucial for capital markets that benefit the broader economy.
His stance reflects consistent positioning throughout his tenure and departure from the SEC. Even while acknowledging global demand for Bitcoin, he maintained that innovation cannot survive without trust and that investor protection and technological advancement must coexist.
3 Key Takeaways:
- Gensler singles out Bitcoin as the only crypto with commodity-like treatment versus speculative altcoins
- Markets reject traditional four-year cycle theory with analysts projecting new Bitcoin highs in 2026
- Bitcoin ETFs drive centralization paradox as decentralized ecosystem integrates with traditional finance
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Gensler: Bitcoin Safe, Other Cryptos Risky
: Former SEC Chair Gensler warns thousands of cryptocurrencies lack fundamentals, singling out Bitcoin as the only legitimate digital asset