The recent approval of crypto ETFs by the SEC has prompted significant discussion about the legitimacy of cryptocurrencies. Proponents argue that this development marks a turning point in the financial world, with some proclaiming it as the most significant event on Wall Street in 30 years. However, others are quick to dismiss the excitement, labeling the current state of crypto as “boring.”
Despite the grandiose claims of legitimization from figures like Michael Saylor and Brad Garlinghouse, the reality is that the approval of ETFs has not fundamentally transformed the nature of cryptocurrencies. The SEC’s decision was not an endorsement of crypto as a legitimate asset class; rather, it was the result of a court ruling against the SEC’s long-standing opposition to bitcoin ETFs based on concerns of fraud and manipulation. SEC chairman Gary Gensler further emphasized that bitcoin is predominantly a speculative and volatile asset, often associated with illicit activities such as ransomware, money laundering, and terrorist financing.
The underwhelming nature of the recent developments has led to the characterization of crypto as mundane and unexciting. However, it is vital to recognize that being boring does not equate to being legitimate. The inherent speculative nature and association with illicit activities continue to cast a shadow over the credibility of cryptocurrencies, regardless of their regulatory status.
The approval of crypto ETFs should not be mistaken for an indication of the industry’s overall legitimacy. As highlighted by the SEC chairman’s remarks, the concerns regarding the speculative and potentially illicit nature of cryptocurrencies persist.
Moreover, the ongoing saga of questionable crypto dealings, such as the case of an online pastor charged with civil fraud for creating a cryptocurrency and falsely claiming divine endorsement, underscores the enduring presence of unorthodox and dubious practices within the crypto sphere. These incidents serve as a stark reminder that the problematic aspects of cryptocurrencies remain prevalent, regardless of regulatory developments.
It is evident that despite the attempts to package and sell crypto through regulated channels, there is still a lack of substantial foundation underpinning the industry’s legitimacy. The recent developments, while significant in their own right, have not resolved the underlying issues that have long plagued the perception of cryptocurrencies.
Ultimately, the notion of crypto as a legitimate and stable entity remains tenuous. As the industry continues to navigate regulatory and ethical challenges, the debate surrounding its legitimacy will undoubtedly persist, warranting continued scrutiny and critical examination.
The Financial Times originally published this article.