Gensler Warns: Most Altcoins Lack Fundamentals, Face Grim Future

Gary Gensler, the former Chair of the U.S. Securities and Exchange Commission (SEC), has issued a stark warning about the future of non-Bitcoin (BTC) crypto assets, suggesting that their outlook is grim. In a recent interview on CNBC’s Squawk Box, Gensler emphasized that most altcoins lack solid economic fundamentals and are primarily driven by sentiment, making them highly susceptible to sudden collapses.

Gensler highlighted that while every financial asset trades on a combination of fundamentals and sentiment, the crypto field is almost entirely driven by sentiment, with very little backing from fundamentals. He noted that Bitcoin, with its global interest and widespread adoption, might persist for a long time. However, the thousands of other tokens in the market lack the same level of interest and economic backing, making them risky investments.

When asked to differentiate Bitcoin from the other tokens he is warning about, Gensler drew a parallel to precious metals. He pointed out that among the eight precious metals, only gold and silver hold significant interest for most people. Similarly, he believes that the fascination with thousands of meme or sentiment tokens is unlikely to endure over time.

Gensler’s comments underscore the need for investors to carefully consider the fundamentals of any crypto asset they are interested in. He advises that tokens driven primarily by sentiment are likely to face a bleak future, as they lack the economic substance needed to sustain long-term value. This warning serves as a reminder for investors to conduct thorough due diligence before making high-risk investments in the crypto market.