Something funny happened during crypto’s week from hell. Even after the Securities and Exchange Commission launched a double-barreled assault on the industry with lawsuits against its two most important companies, crypto prices barely budged. On Monday, Bitcoin was trading close to $27,000, and as of Friday, after days of massive uncertainty and terrible headlines, the price of Bitcoin is around…$27,000.
Ordinarily, a regulatory onslaught by the powerful U.S. government would send asset prices tanking, but that hasn’t happened here. Yes, Coinbase shares took a hit—down around 13% this week—but Bitcoin and other cryptocurrencies appear to have already shaken off SEC Chair Gary Gensler’s legal assault. And this carries some major implications.
Even if you hate crypto and view it all as a giant scam—as is suddenly fashionable—it’s very clear that it is not going anywhere. Bitcoin’s resilience is one sign of that, and another is the fact that people now own more crypto than ever. A series of surveys published today by the Wall Street Journal reveals that the proportion of the population owning crypto has jumped from 2% to 12% in the past four years. More notable are the demographics: While only 5% of men over 60 (Gensler’s bracket) own crypto, an eye-popping 38% of men ages 20 to 40 do, while the figure is 16% for women of that age.
You can write off these people as fools if you wish, but it’s also worth considering how they will receive Gensler’s self-righteous tirades this week against crypto. Will his words make them see the light? Or will they regard him as yet another sign that the U.S. government, where geriatrics have come to dominate, is out of touch?
Gensler’s efforts to portray himself as a high-minded protector of the American people—on display in this new Journal profile—are also hard to stomach. This is a man who climbed to the top rungs of Goldman Sachs and then served as campaign CFO for the ethically challenged Hillary Clinton. He has personal and professional ties to Sam Bankman-Fried, whose massive fraud the SEC failed to spot. The hypocrisy is even more grating given Binance’s allegation, which Gensler has yet to deny, that he arranged a 2019 lunch with its CEO to pitch himself as an advisor for the company—no doubt for a lucrative fee.
In the case of progressive Sen. Elizabeth Warren (D-Mass.), with whom Gensler is now chummy, it is clear her anti-crypto stance is based on sincere conviction. As for Gensler, well, not so much.
All of this has policy implications, too. Whatever Gensler decides to do to the U.S. crypto industry—including burning it to the ground—the industry is flourishing in other parts of the world, from Europe to Asia to the Middle East. Like it or not, crypto and blockchain represent important technologies that are here to stay. While tougher U.S. regulation certainly feels appropriate given recent scandals, Gensler’s scorched earth approach is bad for American innovation. The country deserves better.
Jeff John Roberts
jeff.roberts@fortune.com
@jeffjohnroberts
