Gary Gensler, Chairman of the US Securities and Exchange Commission (SEC), has recently expressed his views about Bitcoin and other digital currencies. In an interview with CNBC, Gensler said that Bitcoin and hundreds of other cryptocurrencies are speculative assets.
Additionally, the SEC Chair highlighted the importance of a clear crypto regulatory framework. “Bitcoin and the hundreds of other coins that investors are trading is a speculative asset class. The trading platforms they are on are not currently under a regulatory regime that protects them like they are trading on the NYSE,” Gensler said.
The crypto market has seen consistent growth since the start of 2021. Despite a dip in May and June, the overall market cap of digital currencies is up by more than 100% in the last 6 months. Bitcoin, the world’s most valuable digital currency, is currently trading near $40,000 with a market cap of approximately $740 billion.
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Due to the latest surge in crypto adoption, discussions regarding a clear regulatory framework for digital assets have increased rapidly. In December 2020, the US Treasury proposed strict cryptocurrency KYC requirements to combat the potential involvement of Bitcoin and other digital currencies in illegal activities.
During the latest discussion with CNBC, Gensler said that the main purpose of the SEC is to protect investors. “I’m pro-innovation, but we also need rules of the road. Satoshi Nakamoto’s invention (Bitcoin), if it is going to meet its potential, it needs to come within public policy frameworks,” he added.
Due to the lack of a clear regulatory framework for Bitcoin and other crypto assets, institutional interest has dried up in the last few months. According to the latest weekly fund flows report published by CoinShares, BTC investment products saw $20 million worth of outflows last week. In a recent interview with CNBC, Nikolaos Panigirtzoglou, JPMorgan’s global market strategist, highlighted a sharp decrease in the institutional interest for Bitcoin and other cryptocurrencies.