Despite approving the trading of spot Bitcoin ETF products, SEC Chair Gary Gensler has labeled the top crypto asset a “highly speculative asset class.”
Bitcoin has always been labeled “speculative” by market regulators with many law enforcement bodies still restrictive about how the public embraces the digital currency.
In the latest TV appearance, Gary Gensler compared Bitcoin to a rollercoaster, cautioning investors to beware of investing in the digital currency noting that its foundation is uncertain.
Gensler’s latest comment hinges on the volatility in the price of Bitcoin over the past few weeks.
JUST IN: 🇺🇸 SEC Chair Gary Gensler says #Bitcoin is a "highly speculative asset class" and compares it to a rollercoaster. pic.twitter.com/oPiL6Ytnod
— Radar🚨 (@RadarHits) March 7, 2024
Bitcoin Rally – An Uncertain Growth Trajectory
Bitcoin’s price has shown an erratic trend since the SEC approved 11 spot Bitcoin ETF products in January. The price of the cryptocurrency was pegged at around $46,376 when the ETF products were approved.
The hype that trailed the acquisition of Bitcoin by the issuers helped drive the price of the flagship cryptocurrency to a new All-Time High (ATH) of $69,170.
Rather than stay up, Bitcoin’s price backtracked in what appears as intense profit-taking campaign, a trend that led to about $1 billion in total market liquidations.
Gary Gensler is calling investor’s attention to trends like this, questioning the reliability of Bitcoin’s foundation to forestall intense valuation cuts.
Legitimacy With Institutional Capital
While market proponents are almost always silent about the volatility in the price of Bitcoin, many acknowledge that Bitcoin now has legitimacy riding on the institutional capital it boasts.
Despite the volatility scare, CryptoQuant Founder and CEO Ki Young Ju has reiterated how Bitcoin may not retest $43,376, the listing price of its spot ETFs. He based this projection on the precedence set by Gold, following the listing of its ETF product back in 2004.
Ki Young Ju argued that with Gold’s price not dropping below its listing price of $444 since the Gold ETF (GLD) started trading on the New York Stock Exchange (NYSE), the same may happen with Bitcoin. This could make $43,376 Bitcoin’s permanent floor price.
Disclaimer: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic’s opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
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