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Community reacts after SEC’s Gensler affirms BTC’s commodity status

28 Jun, 20223 min readRegulation
Community reacts after SEC’s Gensler affirms BTC’s commodity status

Securities and Exchange Commission Chairman Gary Gensler riled up Crypto Twitter on Monday after affirming that Bitcoin (BTC) is a commodity. Questions were raised about its impact on Grayscales’ proposed Bitcoin ETF and why Ethereum wasn’t mentioned.

Speaking to Jim Cramer on CNBC’s Squawk Box on Monday, June 27, the SEC chair said while many crypto-financial assets have the key attribute of a security, Bitcoin is the “only one” that he was comfortable publicly labeling as a commodity.

“Some, like Bitcoin — and that's the only one I'm going to say because I'm not going to talk about any one of these tokens, but my predecessors and others have said they’re a commodity.”

Grayscale Bitcoin ETF

The remarks kicked up chatter about Grayscale’s application to convert its Bitcoin Trust into a spot-based exchange-traded fund (ETF) — which is expected to see a yes-or-no decision from the SEC on July 6.

James Seyffart, an ETF analyst at Bloomberg Intelligence, told his 19,300 Twitter followers that while Gensler’s remarks are positive for Bitcoin, it may not be enough to see Grayscale’s Bitcoin-spot ETF approved next week.

This isn't new from Gensler, but definitely positive IMO. Unfortunately this isn't enough for approval of $GBTC's conversion into a spot #Bitcoin ETF. Odds of SEC approval next week (or this week) are near zero in our opinion. — James Seyffart (@JSeyff) June 27, 2022

Eric Balchunas, a senior ETF analyst at Bloomberg, made similar comments, noting he saw only a 0.5% chance of Grayscale’s GBTC being allowed to convert to an ETF.

No mention of ETH

Crypto Twitter also picked up on the fact that Gensler refrained from mentioning whether he placed Ethereum (ETH) in the same commodities boat, despite the regulator and the Commodity Futures Trading Commission (CTFC) previously agreeing that the asset was a commodity just like Bitcoin.

Any thoughts on why Gensler didn't mention Ethereum as a commodity today? #ethereum— swankyfinance.eth (@swankyfinance) June 28, 2022

Positive for Bitcoin

Nevertheless, Gensler’s views on Bitcoin have been seen as a positive for the king of crypto.

Bitcoin bull Michael Saylor shared the video to his 2.5 million Twitter followers, adding that Bitcoin is essential as a treasury reserve asset, which will allow governments and institutions to support it as a digital asset to grow the economy.

#Bitcoin is a commodity, which is essential for any treasury reserve asset. This allows politicians, agencies, governments, & institutions to support bitcoin as a technology & digital asset to grow the economy and extend property rights & freedom to all. — Michael Saylor⚡️ (@saylor) June 27, 2022

Meanwhile, Eric Weiss, founder of Blockchain Investment Group noted on Twitter that Gensler is the second SEC chair to declare Bitcoin a commodity, making it near impossible for this classification to be altered in the future.

Interestingly, the positive news for Bitcoin resulted in another price decline, falling from a 24-hour high of $21,478 to $20,635 at the time of writing.

Ethereum has fallen from a 24-hour high of $1,234 to $1,171 at the time of writing as the bears retain their grip on the markets.

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