Gensler: Crypto Market Driven by Sentiment, Not Fundamentals

Gary Gensler, the former Chairman of the U.S. Securities and Exchange Commission, has continued to voice his concerns about the cryptocurrency market, even after stepping down from his regulatory role. In a recent interview, Gensler emphasized that the crypto market is predominantly driven by the sentiments of market participants, rather than by fundamental analysis and research.

Gensler's comments come in response to the celebratory reactions from crypto CEOs following the withdrawal of legal enforcement cases that debated the definitions of crypto assets. He noted that while financial assets typically thrive on both fundamentals and sentiments, the crypto field is almost entirely sentiment-driven, with very little based on fundamentals.

Gensler's skepticism aligns with the views of many crypto critics who believe the market is a temporary bubble. He also expressed that Bitcoin may have a better chance of long-term adoption compared to other altcoins, which he considers risk-heavy and likely to crash due to their reliance on sentiment.

Following Gensler's departure, President Donald Trump appointed Paul Atkins as the new SEC chairman. Atkins has been vocal about his support for digital currencies, which has garnered positive expectations from crypto proponents. However, his appointment has also faced criticism from Senator Elizabeth Warren, who questioned his ties to Wall Street and suggested that his appointment could threaten the SEC's independence.

Gensler's remarks highlight the ongoing debate within the regulatory community about the legitimacy and stability of the cryptocurrency market. His perspective underscores the need for more robust market analysis and research to support the long-term viability of digital assets.