Bitcoin’s Ride as Wild as a Rollercoaster, Gary Gensler Silent on Ethereum ETF

By Aaron Feuerstein March 08, 2024 In Bitcoin, ETF, Ethereum
  • Gary Gensler remains non-committal on whether Ethereum is considered a security.
  • In an interview he again highlights the speculative nature of crypto and advises investors to be cautious.
  • Gensler said a court decision had led to the SEC’s approval of Spot Bitcoin ETFs, hinting at a possible similar path for Ethereum ETFs.

While the crypto space is eagerly awaiting a decision from the US Securities and Exchange Commission (SEC) on Spot Ethereum ETFs, Bloomberg journalist Kailey Leinz thought there was one pressing question ahead of this: is Ethereum a security?

SEC chair Gary Gensler, who was confronted with this question in a recent interview, stayed true to his previous musings on the topic—saying something without saying much.

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The SEC chief underscored the importance of evaluating each cryptocurrency on its own merits, pointing out that the potential for profit often depends on the efforts of third parties.


Despite not commenting on specific filings, he emphasised the speculative nature of cryptos, likening their volatility to a rollercoaster—a thrill he said he enjoyed in his youth but approaches with caution today.

One could just look at the volatility of Bitcoin in the last few days. And I grew up loving roller coasters. Maybe in my adult years I don’t ride them as much.

Gary Gensler

He advised investors to be aware of the risks associated with these fluctuating assets and to question the solidity of their underlying foundations. With thousands of tokens in existence, Gensler noted that their classification as securities might hinge on whether investors’ expectations are tied to the endeavours of the project’s creators.

Asked by Leinz if he would consider Ether to be part of that group, the chair was once again evasive:

I understand you’re asking the question, but again, I’m going to defer on that question.

Gary Gensler

Are Future ETFs an Indication for Lack of Market Manipulation?

During another Bloomberg interview a few weeks ago Gensler spoke about the connection between Future and Spot ETFs and whether this influenced the SEC decision for Spot Bitcoin ETFs.

Host David Westin asked the SEC chair if the Future Bitcoin ETFs gave the regulator an indication about market manipulation, or rather a lack thereof and if this influenced decision making for the Spot ETFs.

Gensler’s response once again did not give a clear answer to the question as he focused on broader regulatory challenges, the speculative nature of cryptocurrencies, and the compliance of trading platforms.

He also said that a court decision mandated a reconsideration of the SEC’s stance against Spot Bitcoin ETFs, leading to an approval based on legal obligations rather than the SEC’s initial considerations.

In August 2023 a federal court said the SEC was wrong in denying Grayscale the conversion of its Bitcoin Trust into a Spot ETF. The SEC had denied the conversion based on concerns over anti-fraud and investor protection standards.

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A court in Washington said no—they thought we had not gotten that right and they remanded it back to us. And I thought the most sustainable thing forward was to approve these given the court ruling.

Gary Gensler

The SEC did not oppose the ruling and subsequently, after a lot of delays, gave the green light for the conversion and also the creation of several Spot Bitcoin ETFs in January 2023. Many expect this scenario to repeat with the Ethereum ETF applications

Gensler’s recent comments don’t give any clues as to what his position is on these applications.

Remember that Gensler was the one tipping the scales in favour of the Spot Bitcoin ETFs—as the Commission voted 3-2 in favour of the ETFs.  

Aaron Feuerstein

Aaron Feuerstein

Aaron Feuerstein is a freelance writer based in Melbourne. His focus is on decentralised finance and the regulatory space surrounding blockchain. He holds a Master's in Accounting. When he is not studying the latest legal case, he enjoys his time as a modest but eager hobby cook.

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