Ex SEC Chair Bullish on Bitcoin, skeptic on Altcoin Market
Quick overview
- Gary Gensler expressed concern that the cryptocurrency market is driven more by sentiment than by sound fundamentals.
- He warned that this sentiment-driven nature puts many altcoins at risk of sudden collapse.
- Gensler emphasized the importance of evaluating the underlying fundamentals of digital assets, rather than just their popularity.
- He noted that Bitcoin may endure due to its global interest, comparing it to gold as a valuable asset.
Gary Gensler once again expressed concern about the cryptocurrency sector, claiming that market sentiment, rather than sound fundamentals, drives most digital assets.
The former chair of the Securities and Exchange Commission (SEC) warned in a recent appearance on CNBC’s Squawk Box that this puts many altcoins at risk of an abrupt collapse.
“If [crypto] was of interest to you, consider [how] every financial asset sort of trades on a bit of sentiment and fundamentals, but this field is almost 99 percent, or perhaps one could say 100 percent, sentiment and very little on fundamentals,” Gensler stated during the interview.
He quickly cautioned that most digital assets might not be helpful, saying, “I don’t think we humans will have a fascination with ten or 15,000 memes or sentiment tokens trading over the years.”.
Noting that tokens motivated only by sentiment frequently perform poorly and tend to decline, he added that people must evaluate their risk and look at the underlying fundamentals. In addition to distinguishing Bitcoin from other cryptocurrencies, the MIT lecturer acknowledged that the flagship cryptocurrency may survive due to global interest.
Seven billion people worldwide are very interested in Bitcoin, it might be around for a very long time.
Additionally, Gensler compared Bitcoin to gold, pointing out that while there are many different metals, the most valuable ones, such as gold/ silver, generally attract the public’s attention
Olumide Adesina
Financial Market Writer
Olumide Adesina is a French-born Nigerian financial writer. He tracks, analyzes, and reports changes in financial markets with over 15 years of working experience in investment trading.