Scarce value storage! New SEC Chairman Gary Gensler interviewed, discussing the essence of Bitcoin, acknowledging that many cryptocurrencies are considered securities.

The new chairman of the U.S. Securities and Exchange Commission (SEC), Gary Gensler, who has been in office for three weeks, recently stated in an interview that Bitcoin is a scarce store of value and emphasized the need to establish regulations to protect investors. He also mentioned, "Many cryptocurrencies do fall within the securities category."

"At the core I think investor protection has helped economic growth," says SEC Chair Gary Gensler. "Transparency and competition in markets that's good for investors, that's good for issuers." pic.twitter.com/FoD8MH7JND

— Squawk Box (@SquawkCNBC) May 7, 2021

Directing Focus on Robinhood

Gary Gensler was first asked about the famous GME incident. He believes that the current market is vastly different from the past, with global retail investors able to easily trade through apps. Therefore, related regulations must keep up with the times, reshaping regulations to protect investors. He seems to imply that the SEC has targeted Robinhood:

Especially with apps that encourage the public to trade, claiming zero commission fees, but actually profit from selling user orders and data. We already know this to be true and will conduct a comprehensive review, listen to the opinions of investors, and update regulations accordingly.

He emphasizes that when you and I place market orders on so-called retail trading platforms, over 90% of the orders do not go to the New York Stock Exchange or NASDAQ, but to market makers. We do not receive the "best price" as claimed by the platform.

Many Cryptocurrencies are Securities

Turning to the cryptocurrency field, Gary Gensler, who previously taught at MIT Sloan School of Management, researching artificial intelligence, blockchain, and emerging fintech, is quite knowledgeable about blockchain. He points out:

The SEC's primary authority lies in determining securities. Many tokens, which I would not currently call cryptocurrencies, indeed fall under securities. The SEC has previously taken enforcement actions on this.

What about Bitcoin?

Gensler talks about his views on Bitcoin, saying:

Bitcoin is a digital, scarce value store, but a highly volatile asset. There are investors who may want to take advantage of its high volatility or profit from its low correlation with other markets in certain situations. I believe we need to provide more investor protection measures.

He points out that currently, the U.S. lacks federal regulations to govern cryptocurrency exchanges. However, if investors still want to trade and understand that Bitcoin is highly volatile and speculative, the SEC has put in place relevant protective measures, but this is also where the current regulatory framework is lacking.

So, who should fill the gaps in the incomplete regulations? Does it need help from Congress or can the SEC intervene? Gensler says:

Regarding Bitcoin, unlike other cryptocurrencies, the U.S. Commodity Futures Trading Commission (CFTC) has the power to combat fraud and market manipulation. Federal-level units do not have the authority to intervene in either spot or futures exchanges. Therefore, we will seek help from Congress to see if we can establish some regulatory framework in this speculative asset class.

Why Call Bitcoin a Value Store?

CNBC host asked Gensler to temporarily set aside his role as SEC chairman and explain why Bitcoin is called a value store. He explains:

In the face of emerging technologies, SEC neutrality is crucial. Bitcoin is a digital, scarce, highly volatile value store. It may go to zero or skyrocket; that's its nature, so there must be relevant investor protection measures.

Furthermore, the host also asked whether Bitcoin will eventually go to zero or skyrocket. Gensler says that he is now the SEC chairman, not an MIT professor, so he can't say much.

How about Musk Hosting SNL?

It was reported earlier that Tesla founder Musk will host "Saturday Night Live" on May 8.

The CNBC host also mentioned Musk hosting SNL. Dogecoin has doubled in the past week, and the public speculates that Musk will mention Dogecoin on the show as he has tweeted about it several times in recent weeks. Will Gensler think that public remarks that may affect coin price fluctuations should also be subject to protective measures?

Gensler says:

Just as we used to regulate whether you could make phone calls in the trading floor of exchanges, with technology advancing rapidly, regulations must be updated to keep pace with the times. Like how our interviews may now be recorded by sentiment analysis software and cause fluctuations in certain assets, what we need to do is perfect regulations to prevent the public from being manipulated by information such as social media.