tl;dr
Former SEC Chair Gary Gensler warns that most non-Bitcoin cryptocurrencies lack solid economic fundamentals and rely almost entirely on market sentiment, making them vulnerable to sudden collapse. He compares Bitcoin to gold, suggesting it has lasting value, unlike the thousands of other tokens whic...
Former SEC Chair Gary Gensler has issued a stern warning about the future of most altcoins, highlighting their lack of fundamental economic value. According to Gensler, these non-Bitcoin cryptocurrencies rely almost entirely on market sentiment, which leaves them highly vulnerable to abrupt collapses.
In a recent interview on CNBC’s Squawk Box, Gensler emphasized that while financial assets typically trade on a combination of fundamentals and sentiment, the altcoin market is overwhelmingly driven by sentiment, with little to no underpinning in fundamental economics. This creates a risky environment for investors, especially given the vast number of tokens—ranging from 10,000 to 15,000—that flood the market.
Gensler contrasts this with Bitcoin, likening the flagship cryptocurrency to gold. He points out that while there are multiple precious metals, only a few such as gold and silver capture the sustained interest of people worldwide. Similarly, Bitcoin commands long-term fascination and utility, supported by global interest from billions of people.
The former SEC Chair urges investors to carefully assess their personal risk by considering the economic fundamentals behind these tokens. In his view, the numerous altcoins, often driven by fleeting hype and sentiment, are unlikely to maintain long-term value or interest, warning that most will eventually decline.