- SEC chair Gary Gensler cautioned investors about the extreme volatility in crypto markets after Bitcoin briefly hit a new all-time high before plunging 11% within hours. He likened the volatility to a rollercoaster ride.
- Gensler urged investors to carefully evaluate each crypto asset’s fundamentals like cash flows and use cases. He remained cautious about approving a spot Ethereum ETF amid multiple applications under review.
- The SEC has until May 23 to decide on a spot Ethereum ETF application, which could significantly impact Ethereum’s price outlook. Gensler would not say whether Ethereum is a security, though he views most cryptocurrencies as securities.
SEC chair Gary Gensler recently commented on the extreme volatility in the crypto market following Bitcoin’s brief ascent to a new all-time high. He likened the market’s price swings to a rollercoaster ride and urged investors to carefully evaluate each crypto asset.
Gensler Cautions Investors After Bitcoin’s Volatile Price Action
Gensler made the statements during a March 6 interview with Bloomberg. He compared the crypto market’s volatility to a rollercoaster ride, stating “One could just look at the volatility of Bitcoin in the last few days. And I grew up loving roller coasters … but you really should be conscious, as the investing public, that this is a bit of a roller coaster ride on volatile assets.”
The SEC chair said investors should examine the fundamentals of each crypto asset as it reaches “the top of [the] hill.” Important considerations include cash flows, use cases, and whether the asset could be deemed a security.
Bitcoin had briefly touched a record high of $69,324 on March 5 before plunging 11% to $60,861 within hours. This volatile price action caused a broader market rout. The leading cryptocurrency and overall market have since recovered most losses.
Gensler Remains Cautious on Ethereum ETF Approval
When asked about potential approval of spot Ethereum ETFs, Gensler said the SEC currently has filings under review but declined to comment on specific applications.
The regulator has until May 23 to decide on VanEck’s spot Ethereum ETF application. Many expect the SEC will simultaneously issue decisions on other pending applications.
Gensler also would not say whether Ethereum is considered a security. He noted there are thousands of crypto tokens, many of which could be deemed securities. The SEC chair is known for viewing most cryptocurrencies as securities under the regulator’s purview.
Conclusion
Gensler urged investors to carefully weigh the risks in the volatile crypto market following Bitcoin’s latest – albeit brief – all-time high. His stance on spot Ethereum ETF approval remains cautious as the SEC reviews multiple applications. The regulator’s decisions could significantly impact Ethereum’s price outlook later this year.
