In fact, former Securities and Exchange Commission (SEC) Chair Gary Gensler has been sounding the death knell for many altcoins. He thinks that currently the crypto space is driven largely by sentiment and not underlying value. Further, Gensler made a distinction between Bitcoin and other cryptocurrencies, conceding that the latter will only survive if there is interest from people around the world. He cautioned investors to be careful of the risks associated with altcoins. He argues that most of these digital currencies will eventually go to zero.
Gensler pointed out that the cryptocurrency sector's reliance on market sentiment rather than sound fundamentals puts numerous altcoins at risk of a sudden collapse. He stressed the need to look with a discerning, critical eye at the fundamentals behind any digital asset before investing.
In his testimony, Gensler even compared Bitcoin to gold directly, explaining how the two are similar as stores of value. He noted that while various metals exist, the most valuable ones typically capture the most public attention and maintain their value over time. This juxtaposition is an encouraging sign that Gensler sees Bitcoin for what it could be—a persistent and important feature of the financial landscape.
“Seven billion people worldwide are very interested in Bitcoin, it might be around for a very long time.”
As bullish as his views were on Bitcoin, Gensler remained negative on the wider altcoin market.
“I don’t think we humans will have a fascination with ten or 15,000 memes or sentiment tokens trading over the years.”
Gensler’s statements suggest the importance of a careful and rigorous approach to cryptocurrency. He talks about how Bitcoin is being compared to precious metals such as gold. This is central to his view that Bitcoin has the potential to be a long-term store of value.
