Former U.S. Securities and Exchange Commission (SEC) Chair Gary Gensler has sounded the alarm. He worries that crypto assets other than Bitcoin (BTC) aren’t sustainable in the long run. Gensler believes most altcoins lack fundamental economic underpinnings and are largely driven by market sentiment, which he suggests is unsustainable. In fact, he expects a brutal crash for most of these so-called altcoins.
To emphasize the distinction, Gensler even went so far as to compare Bitcoin with precious metals such as gold. His point was that though there are eight precious metals, the masses largely pay attention only to gold and silver. Similarly, Gensler suggests Bitcoin may maintain its relevance due to widespread global interest, citing the potential for 7 billion people worldwide to engage with the cryptocurrency.
Gensler cast doubt on the longevity of meme coins and other tokens driven by sentiment. He emphasized the fact that there are thousands of these tokens. After that, he asked how they would keep people interested over the long haul, like more mature assets. Gensler highlighted the key distinction between Bitcoin and altcoins. He likened it to how we consider a handful of fundamental precious metals vs a long list of not-so-famous substitutes.
Gensler’s call for more focus on enforcement was reiterated during this interview on CNBC’s Squawk Box. During the interview, he emphasized his concerns about the lack of solid economic foundations for most altcoins. He thinks their values are solely at the whim of a frothy market.
He went on to claim that sentiment-driven assets usually perform poorly in the long-term. Taken on their own, Gensler’s views point to a very hostile future for most of the altcoin market as the speculative bubbles burst.
