Gary Gensler Declares Bitcoin a Commodity: What It Means for Crypto Markets

Bitcoin’s Status Confirmed

In a recent episode of CNBC’s Squawk Box, SEC Chair Gary Gensler stirred the waters of Crypto Twitter by affirmatively designating Bitcoin (BTC) as a commodity. While this declaration might sound like a big deal, it’s really just Gensler being Gensler — a regular part of his ongoing discourse on crypto assets. He stated, “Some, like Bitcoin — and that’s the only one I’m going to say…,” leaving many pondering the implications for other cryptocurrencies.

Grayscale and ETF Hopes

The conversation quickly shifted to Grayscale’s ambitious proposal to convert its Bitcoin Trust into a spot-based ETF. The SEC is anticipated to deliver a decision on this matter by July 6. Analysts like James Seyffart and Eric Balchunas from Bloomberg expressed cautious optimism, yet voiced skepticism about the probability of approval — estimating it around 0.5%.

Where Does Ether Stand?

One of the most pressing questions from observers was why Gensler failed to mention Ether (ETH) in his comments. Historically, there has been a consensus between the SEC and the Commodity Futures Trading Commission (CFTC) that Ether holds commodity status, yet it was curiously absent from Gensler’s remarks. Twitter was abuzz with speculation as users wondered if this omission might signal something deeper about Ethereum’s future in the regulatory landscape.

Winners and Losers in the Market

Despite the bullish notes surrounding Bitcoin, the cryptocurrency experienced dips in value. Bitcoin dropped from $21,478 to $20,635 shortly after the news broke, while Ether slid from $1,234 to $1,171. It seems that even positive news sometimes triggers a bit of a bearish response. Go figure!

The Bigger Picture

The overarching narrative suggests that while Gensler’s recognition of Bitcoin as a commodity is beneficial, the lack of clarity regarding Ether and ETF approvals leaves a cloud of uncertainty in the crypto market. Michael Saylor, a notable Bitcoin bull, reflected on social media about how this classification can boost Bitcoin’s credibility as a treasure reserve asset, supporting its growth and broader acceptance.