SEC Chair Criticizes Bitcoin Despite Approving ETFs

This week, the head of the US Securities and Exchange Commission (SEC), Gary Gensler approved Bitcoin ETFs but is still critical towards cryptocurrency. He questioned the limited use cases of Bitcoin beyond illegal activities and even pointed out its ironic development towards centralization.

Gensler warned on CNBC “Investors should be aware of the highly speculative, volatile nature of Bitcoin,” and noted that it signals neither a positive nor negative position toward this asset itself. He challenged the assertion that Bitcoin was a store of value and unit of account pointing out to its alleged role in ransomware fraud, money laundering among other illicit practices.

Further, Gensler found it amusing that an ETF, a very centralized product, is now being offered as the supposed decentralized asset like Bitcoin. This mirrors a widespread sentiment among the Bitcoin community, as many proponents call for holding BTC in personal wallets to achieve genuine decentralization.

However, some industry experts also state that ETFs give institutions access to Bitcoin while they are not capable of directly controlling the cryptocurrency. In their view, it will prove to be a step towards widespread acceptance – in particular by organizations whose investment opportunities are limited to buying bundled assets.

Gensler also noted the dominance of mining power by a handful of companies, thereby raising issues about Bitcoin’s basic platform. He claimed that rival currencies leveraged a more dispersed “common economy” than the mining geography of Bitcoin.

Gensler criticized the centralization of Bitcoin mining, however moves to decentralize it are already being put in place. Such a trend is seen in Jack Dorsey’s non-custodial mining pool initiative.

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