Gensler Likens Bitcoin to a Roller Coaster

Following the first cryptocurrency reaching a new peak, SEC Chairman SEC Gary Gensler highlighted its high volatility and offered advice to investors.

“[Cryptocurrencies] are a highly speculative asset class. Just look at the volatility of Bitcoin in recent days. I grew up loving roller coasters. […] But investors really need to be aware that such investments are a bit of a ride on this attraction,” he said.

Continuing his thought, Gensler noted the importance of assessing the fundamental aspects of an asset when it “reaches the top.” This includes, for example, the cash flow it generates, its use cases, and its potential status as a security, added the SEC head.

On March 5, Bitcoin’s price hit a ATH above $69,000, but then corrected. The price fell below $62,000. At the time of writing, the price has recovered, with the cryptocurrency trading around $67,500.

Gensler declined to comment on expectations regarding the potential approval of spot Ethereum ETFs in May, amid the successful launch of similar Bitcoin funds. He only confirmed that the Commission is reviewing applications.

In March, the SEC once again extended the decision deadlines for proposals from BlackRock and Fidelity. However, May 23 marks the deadline for VanEck’s application. Some experts believe this could prompt the regulator to give the “green light” to the products, while others are less optimistic. Prediction market Polymarket estimates the probability at 38%.

Gensler also refrained from commenting on whether Ethereum is considered a security and how this affects ETF approval. He merely reiterated his view that there are up to 20,000 tokens, many of which could be classified as investment contracts, as investors rely on the efforts of project teams in anticipation of profit.

Previously, the SEC head expressed doubts about the necessity of cryptocurrencies for the modern world and suggested they could harm the global financial system.

He views the digital asset industry as rife with fraud, scams, bankruptcies, and money laundering.