Former SEC chair warns 15,000 crypto tokens face collapse

Gary Gensler, former chairman of the U.S. Securities and Exchange Commission (SEC), shared a critical perspective on the cryptocurrency market in a recent CNBC interview.

He separated bitcoin from the rest of the crypto space, suggesting that while bitcoin could persist as a form of digital gold, most other tokens are unlikely to survive over time.

“Every financial asset trades on fundamentals and sentiment, but this field is almost 100% sentiment and very little fundamentals,” Gensler said, emphasising the emotionally driven nature of digital assets.

He acknowledged bitcoin’s global recognition, citing interest from nearly 7 billion people as a factor contributing to its resilience.

However, he cautioned against the broader market, which includes roughly 10,000 to 15,000 other tokens.

Gensler urged investors to examine their risk exposure and assess the economic foundations of their crypto holdings.

“If it’s just sentiment, those don’t end up well, and most go down,” he warned.

“Humans have a fascination with 2–3 precious metals like gold. I don’t think we’ll have a fascination with 10,000–15,000 meme or sentiment tokens over the years,” he said, likening bitcoin to precious metals.

His comments reflect skepticism about the long-term viability of tokens that lack clear utility or sound economic models.

At the same time, the SEC is undergoing leadership changes, with new Chair Paul Atkins calling for a “rational, coherent, and principled approach” to digital asset regulation.

Beyond crypto, Gensler also criticised aspects of U.S. trade policy, particularly toward China.

He warned that current strategies could damage investor confidence and increase market instability.

Gensler expressed concern about reduced resources at the SEC, noting the agency is now “about 20% smaller,” which may limit its ability to enforce rules and protect markets from manipulation.