It’s not the first time Gary Gensler has criticised cryptocurrencies, and often his position gives away someone who doesn’t know much about digital assets. In particular, he addressed the Securities Industry and Financial Markets Association’s annual meeting in October 2022. Of course, Gensler couldn’t help but bring up the field of coins.

At the time, the head of the Securities and Exchange Commission described the cryptocurrency industry as overly centralized, allegedly due to the enormous influence of exchanges and other intermediaries. However, it is possible to interact with crypto and conduct many of the necessary transactions on a non-custodial basis, i.e. without the involvement of centralised bodies.

Gary Gensler, head of the US Securities and Exchange Commission

Apparently, the official’s negative attitude towards digital assets has not changed in any way since then.

What the authorities think of cryptocurrencies

During the discussion, Sergeant Lawrence Holmes noted that soldiers are looking for alternative investment vehicles – including cryptocurrencies. He asked Gensler to comment on the risks involved in buying crypto. Here’s the SEC chairman’s response, cited by Cointelegraph.

This is the Wild West. Most of those ten or fifteen thousand tokens will be completely devalued. History tells us that there is no room for “micro-currencies”. I mean, you know, we have the US dollar, Europe has the euro and so on.

In this case, Gensler decided to scare the audience with the prospect of losing money on crypto investments. Of course, the cryptocurrency industry is full of fraudulent projects or simply failed ecosystems like Terra. But at the same time, there are plenty of quality blockchain projects that are changing finance for the better. Obviously Bitcoin, Etherium, Solana and other popular coins probably won't drop to zero, but Gary's focus here was more advantageous on the smaller projects that really know how to collapse in value.

SEC Chairman Gary Gensler

Gensler also advised soldiers not to make hasty decisions because of a sense of foregone profits. He also left one interesting remark.

Most of the tokens do not comply with securities laws, and they should.

Recall that Gary Gensler has hinted several times in the past that the US Securities and Exchange Commission might well recognise some cryptocurrencies as securities. This would be one of the worst-case scenarios for the crypto market, as these coins would then be subject to additional, fairly stringent restrictions by the SEC.

However, the agency is not doing so well: For example, Commission officials have not been able to convince a court that Ripple’s XRP is allegedly a security since December 2020. And the cause of action at the time was “an unregistered offering of $1.3 billion worth of securities”.

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Contrary to the scepticism of SEC officials, this year has started with a local bullrun for Bitcoin and altcoins. In particular, the major cryptocurrency managed to surpass the $19,000 level yesterday before pulling back, although BTC is now just below that.

Bitcoin exchange rate on the 1-hour chart

In addition to the regular spot market, Bitcoin has also become a bullish favourite in the exchange-traded fund (ETF) market. For example, the WGMI ETF, which is directly related to the mining of the major cryptocurrency, is the current market leader in terms of growth rate – its value has increased by around 40 per cent over the year.

Six-month WGMI value dynamics

ETFs for the bitcoin mining industry are leading the way in terms of profitability, which is considered a rare occurrence – especially against the backdrop of notable financial problems for miners late last year. As a reminder, WGMI is made up of just 20 companies, including Argo Blockchain, Bitfarm and Intel.

The WGMI exchange-traded fund was listed on Nasdaq in February 2022, but is not directly dependent on the value of BTC. It consists of 80 per cent of securities of companies that generate at least 50 per cent of their revenue or profits from Bitcoin mining. The remaining 20 per cent is invested in companies that hold “a significant portion of their net assets” in Bitcoin.

ETF returns

As a reminder, the first Bitcoin ETF approved in the US was the ProShares Bitcoin Strategy ETF, launched in October 2021. It tracks cryptocurrency prices through futures contracts traded on the CME exchange. The first ETF was very popular at first, with a trading volume of $1 billion on the first day of listing.

The success led many to believe that regulators would eventually approve the first Bitcoin ETF based on the spot market in 2022. However, the protracted crypto-zima reversed course. The US Securities and Exchange Commission’s slowness in this matter has even prompted a lawsuit against it.


We don't think it's a good idea to see the head of the SEC as a cryptocurrency expert. Still, he scares people with the prospect of a coin collapse, which may indeed happen, but is silent on the fundamental prospects of crypto. These are, of course, independence from banks and officials, the ability to fully own one's assets if one uses hardware wallets, and a fixed rate of inflation, which can also turn into negative issuance. Naturally, a representative of the state will not acknowledge these pluses, because they go against the centralised approach of various countries.