Gary Gensler, former Chair of the U.S. Securities and Exchange Commission (SEC), has once again cast doubt on the long-term viability of most digital assets, asserting that the broader crypto market is largely driven by sentiment rather than substance.
In a recent interview on CNBC’s Squawk Box, Gensler warned that many altcoins lack fundamental value, making them highly susceptible to sudden price collapses. “This field is almost 99%, or maybe one might say 100%, sentiment and very little on fundamentals,” he said.
Crypto Market Risks
Gensler cautioned that most digital tokens function more like speculative instruments than sound investments. “I don’t think we humans will have a fascination with ten or 15,000 memes or sentiment tokens trading over the years,” he noted, emphasizing that investors should carefully evaluate risk and the underlying fundamentals of any asset.
Why Bitcoin Stands Apart
Despite his criticism of the crypto industry at large, Gensler drew a clear line between Bitcoin and the rest of the market. He acknowledged Bitcoin’s potential staying power due to global interest and adoption, comparing it to gold in the world of precious metals. “There are many metals, but humanity focuses on a few—like gold and silver. Bitcoin plays a similar role,” he explained.
Comments on Tariffs and AI
In addition to crypto, Gensler touched on U.S.-China tariffs, noting that policy uncertainty is contributing to market volatility. He warned of a potential “quagmire” if diplomatic efforts remain inconsistent, stressing the importance of quiet, consistent communication with global counterparts.
Now a lecturer at MIT Sloan School of Management, Gensler is focusing his research on Artificial Intelligence (AI) and its growing role in finance. He described AI as “the most transformative technology of our times,” predicting that the next 5–12 years will see sweeping changes in trading, investment, and financial management.
While he believes AI will revolutionize financial services, Gensler said it’s still not quite fast enough for high-frequency trading but is evolving rapidly.
