The chairman of the Securities and Exchange Commission (SEC) has reiterated his criticisms of Bitcoin (BTC), despite recently approving a number of exchange-traded funds (ETFs) for the cryptocurrency. In an interview with CNBC, the chairman argued that Bitcoin’s use cases are limited, often associated with illicit activities, and have ironically trended toward centralization over time.
Bitcoin’s value dropped by 6% to $43,500 on Thursday as investors moved away from the asset following the launch of its much-anticipated ETF. The chairman warned investors that Bitcoin is a highly speculative and volatile asset. He emphasized that the SEC does not “approve” or “endorse” Bitcoin, despite the recent ETF approvals.
He further elaborated on his previous statement, listing “ransomware, money laundering, sanction evasion, and terrorist financing,” among Bitcoin’s alleged use cases. He argued that Bitcoin’s purported use as a store of value and medium of exchange remains questionable. While he acknowledged the innovative potential of blockchain as an “accounting system,” he pointed out the irony of approving an ETF for a supposedly “decentralized” system.
Many in the Bitcoin community agree with the chairman’s views on ETF products, advising followers to hold their own BTC in a personal wallet where possible, rather than with an ETF. However, others in the industry argue that ETFs provide Bitcoin access to companies that can’t control coins themselves and can only own assets packaged within an ETF or securities wrapper.
Even without an ETF, the chairman claimed that there is significant centralization within Bitcoin, particularly in relation to its mining firms. He stated that Bitcoin is largely produced by a handful of mining companies. In contrast, rival currencies have a “common economy” that relies on them.
According to the Hashrate Index, just two Bitcoin mining pools control over 50% of the network’s hash rate, which is enough to re-write the network’s transactions if both pools conspire to act nefariously. However, these pools are made up of several other mining firms that can choose to change pools or mine independently at any point. Last year, Twitter co-founder Jack Dorsey supported a new non-custodial mining pool aimed at decentralizing the mining industry.
This News Article was automatically generated by Bob the Bot (AI)
| Information | Details |
|---|---|
| Geography | Global |
| Countries | |
| Sentiment | negative |
| Relevance Score | 1 |
| People | Jack Dorsey, Gary Gensler |
| Companies | Binance Futures, Securities and Exchange Commission, Twitter, Hashrate Index, CNBC |
| Currencies | Bitcoin |
| Securities | None |
