Gary Gensler’s Losing Record On Crypto

Depending on your daily involvement in markets, you either have no idea who Gary Gensler is or you’re familiar with the name. Gensler is chair of the Securities and Exchange Commission (SEC).

The head of the SEC really shouldn’t be a household name; they should be a faceless figure running a government agency. However, everybody involved with crypto knows Gary’s name and face. That’s because he has been extremely involved in the crypto market since starting his position as the head of the SEC. He has attempted many times to regulate the crypto market. Some in the cryptocurrency industry would say that his involvement has often skirted the line of market interference.

When the SEC targets a company or industry, it’s bearish news. So of course, when the SEC announces its targeting crypto firms, it tends to shake up the market.

Gensler and the SEC have targeted multiple companies that deal with the Ethereum Foundation. They’re also reportedly trying to classify Ethereum (ETH) as a security… again. All of this coming just a few months before the SEC’s deadline on whether or not to accept the multiple applications for the first Ethereum spot exchange-traded fund (ETF). Quite a coincidence.

As expected, the crypto market didn’t take the news too well. The market was already in the midst of a small correction, but Ethereum tumbled all the way down to a low of about $3,150 on Tuesday. Down over 22% from its recent yearly high set on March 12th. ETH dipped further than Bitcoin (BTC), due to extra fear from the SEC news.

The good news is that the SEC has a long losing track record in regard to crypto. There have been many attempts to regulate crypto, most of which without any crypto insider insight. However, no meaningful regulation has taken place. More importantly, very little action has been proactively taken against bad players in the crypto industry.

The biggest headline trial against a crypto company was the case of the SEC versus Ripple. You’ll know Ripple as the company behind XRP (XRP), the sixth-largest cryptocurrency by market cap. The SEC has been trying to define XRP as a security for years with zero luck. The SEC launched the lawsuit against Ripple in December 2020 and is set to go to trial next month.

For a more detailed timeline of the lawsuit, click here. To summarize, the SEC has made very little progress in the more than three years since it filed the lawsuit. Many crypto insiders would say that if the SEC can’t win the lawsuit to classify XRP as a security, then it stands no chance of classifying the much more decentralized ETH as a security.

We’re also witnessing the government’s repeated attempts to squash the Bitcoin spot ETFs, with several delays in the final decision deadline. Companies had been filing for spot Bitcoin ETFs for many years, but the applications really started to ramp up in 2023. BlackRock (NYSE: BLK) tossed its name into the ring, and that’s when matters got serious. Gary Gensler was very publicly against the ETFs, but others in the SEC disagreed.

The 2023 batch of spot ETF applications was delayed until the last possible decision deadline, and it seemed approval wasn’t coming. However, ultimately the SEC was forced to allow companies to launch spot Bitcoin ETFs. There are now over 10 spot Bitcoin ETFs on the market (see chart).

Cathie Wood’s ARK Invest immediately submitted an application for a spot Ethereum ETF, and then started a new wave of ETF applications. Admittedly, there are more reasons for the SEC to be skeptical of an Ethereum ETF. However, there have been Bitcoin and Ethereum futures ETFs on the market for over five years. The SEC should approve the ETFs to give investors safer and more transparent crypto trading vehicles.

This is not the time to get bearish on Ethereum. Crypto is carrying tons of momentum versus the SEC right now. There is a real shot that the ETH ETFs win approval in 2024 and we’ve already seen the tidal wave of cash that rushed into Bitcoin following the spot BTC ETFs.

Don’t get shaken out by the Fear, Uncertainty, and Doubt (FUD).

Don’t sell your ETH and give Wall Street a better entry price.

Now is the time to load up and double down on your Ethereum bets. The spot Ethereum ETF will take ETH to the moon. Gary Gensler is all that stands in the way, and he’s going against Larry Fink of BlackRock once again. Larry is 576 – 1 when applying for an ETF with the SEC. Gensler has no credible win to speak of.

BlackRock is the world’s largest asset manager, with $10 trillion in assets under management. The SEC is an understaffed bureaucracy with an annual budget of about $384 million. Pick your side. I know where I’m placing my bets.

This article previously appeared on Investing Daily.

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