Gary Gensler Takes a Shot At Crypto, Says Market Is Built on 99% Sentiments

Despite stepping down as a key regulatory official, Gary Gensler has continued to comment on the state of the crypto market and has more recently reiterated his doubts about the foundation of the crypto market dynamics

The former Chairman of the U.S. Securities and Exchange Commission has maintained that the cryptocurrency industry fundamentally lacks the tools necessary to carry out unbiased market analysis and research.

In a recent interview with CNBC, Gensler explained that the sentiments of market participants largely drive the crypto market. His outlook mirrors the skepticism of crypto critics who are convinced that the crypto market is a temporary bubble

Notably, Gensler’s assertions were a response to being questioned about the celebratory reactions from Crypto CEOs following the withdrawal of legal enforcement cases that debated the definitions of crypto assets

“These are very small parts of the financial markets. If you were interested in this [crypto], think about very financial assets sort of trades.” Gensler said, noting that financial assets typically thrive on fundamentals and sentiments. “But this field is almost 99% or maybe one might say a hundred percent sentiments and very little on fundamentals,” he added

Remarkably, Gensler asserts that Bitcoin may have the upper hand when it comes to long-term adoption. Although he acknowledges that there is keen interest in the leading asset, he remains convinced that other existing altcoins, which rely on sentiment, are risk-heavy and are likely to crash

Upon stepping down on January 20, 2025, President Donald Trump appointed Paul Atkins as the new SEC chairman in April. Expectations are largely positive amongst crypto proponents as Atkins has been vocal about his support for digital currencies in previous years

However, Atkins has not been shielded from criticisms from his colleagues in the Senate. U.S. Senator Elizabeth Warren, a vocal crypto skeptic, notably questioned his long-term ties to Wall Street, adding that Atkin’s appointment is a threat to the SEC’s independence