News - Is Gary Gensler secretly a Bitcoin maximalist?

By Mike Hesp

Is Gary Gensler secretly a Bitcoin maximalist?

Bitcoin (BTC)
Crypto acceptance
ETF

For Gary Gensler, one thing has long been clear: Bitcoin, not crypto. He also teaches this to his students as a lecturer at MIT in 2018. But is the head of the SEC also a true Bitcoiner?

The admission for the Bitcoin Spot ETF almost failed. The decision on the Bitcoin Spot ETF was extremely narrow, with three votes for and two against. Two Republicans were for, two Democrats against. At the tip of the scale was the head of the U.S. Securities and Exchange Commission himself: Gary Gensler. Rumor has it that his decision was politically motivated. But perhaps Gary Gensler is also a Bitcoiner who wants to promote the adoption of the largest cryptocurrency. These arguments speak for themselves.

Bitcoin, not crypto: Gary Gensler takes action against altcoins

What speaks in favor of Bitcoin maximalist Gary Gensler is his attitude toward Ethereum and co. In the letter which legitimizes the cryptocurrency Bitcoin as an ETF, the SEC chief also tackles altcoins.

"Importantly, the Commission's action today focuses on ETPs that hold a commodity, namely Bitcoin," the Jan. 10 letter reads. The approval of Bitcoin ETFs should "in no way signal the Commission's willingness to approve listing standards for crypto securities." Gary Gensler continued: "As I have said in the past, the vast majority of crypto assets are investment contracts. As such, they are subject to federal securities laws."

Impact versus resource

Gensler has long criticism on cryptocurrencies with an ICO background. Such an "Inital Coin Offering" is similar to "Inital Public Offerings," which are familiar from the stock market. This means that a privately-led company conducting an IPO is for the first time listing its own securities offers to the public. According to Gensler, this also applies to ICO projects, which is why Ethereum, Cardano and co. should be regulated as securities.

Bitcoin, on the other hand, is not a security. In a interview with Jim Cramer in 2022, Gensler said, "Bitcoin is the only commodity." The SEC chief thus equates the cryptocurrency with the commodity gold. What does this comparison require? A good understanding of Bitcoin and proof of work.

Gary Gensler sends students to the Bitcoin rabbit hole?

Gary Gensler undoubtedly has this understanding. After all, "Before joining the SEC, Gensler was a professor of Global Economics and Management at the MIT Sloan School of Management," according to his personal description. In his lectures, he taught students about hash functions, cryptography and the problem of Byzantine generals. "Satoshi Nakamoto solved this problem," Gensler explained to MIT in 2018.

In the lecture (starting at minute 19:30 it's about Bitcoin) you realize: Gary Gensler has fun talking about Bitcoin. The now 66-year-old Democrat explains "Bitcoin Pizza Day," decentralization, "Banking the Unbanked" and how blockchain can stabilize the financial sector.

The video is just an introduction to the semester at MIT. You can watch the entire 23-part series on Bitcoin and blockchain of Gary Gensler view on YouTube. On X (formerly Twitter), users celebrate the SEC chief. "I actually got into Bitcoin because of exactly these lectures. Gary [Gensler] pilled me orange," reads, for example, one response.

So why is Gary Gensler criticizing Bitcoin?

When you hear Gary Gensler talk about fiat money and proof of work, you might think he is a Bitcoin maximalist.

But in his statement on the approval of the ETF, the SEC chief criticizes, "We have today approved the listing and trading of certain spot Bitcoin ETFs. But we have neither recognized nor approved Bitcoin," he writes, pointing out that the cryptocurrency has primarily speculative value and is also used for crime. This does not initially speak in favor of a Bitcoin mentality. However, the definition of a Bitcoiner can also be interpreted broadly. Especially since Bitcoin is actually used for criminal purposes, albeit only to a small extent.

Moreover, as head of the most powerful regulatory body in the world, Gary Gensler must also act along these lines. Regardless of whether this matches his own opinion or not. Still, it was enough for the Bitcoin Spot ETF. Courtesy of (Bitcoin maximalist) Gary Gensler.

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