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Decrypt1 min read
What The Bitcoin Drop Since Gensler Left Says About Markets And Regulation
TL;DR
Since Gary Gensler's departure from the SEC in January 2025, Bitcoin's price has plummeted from around $109,000 to approximately $75,000. This decline suggests that the anticipated positive regulatory changes did not materialize and may reflect a broader loss of faith in the crypto industry.
Key points
- Bitcoin's price fell from $109,000 to $75,000 after Gensler's departure
- Market participants lost faith in the crypto industry
- Speculative investments surged without regulatory oversight
When Gary Gensler left the US Securities and Exchange Commission in January 2025, Bitcoin was trending higher, and many expected a more favorable regulatory backdrop to drive further upside. Instead, BTC has fallen sharply to a zone that complicates a once-popular narrative that regulation, or Gensler specifically, was the primary force holding the market back.
Bitcoin’s Price May Be Saying More About Markets Than Regulators
The market reaction to regulatory change hasn’t played out the way many expected. Analyst Benjamin Cowen has mentioned on X that when Gary Gensler stepped down from the US Securities and Exchange Commission (SEC) in January 2025, Bitcoin was trading around $109,000. Today, it sits closer to $75,000.
Cowen argues that one major reason the crypto markets have suffered is that market participants started to lose faith in the industry itself. After Gensler left, it essentially just opened the floodgates to the grift age of crypto.
During the period, the influencers and politicians were launching memecoins and rug-pulling their followers every day, without fear of any repercussions. This led to a massive misallocation of capital, with liquidity flowing into speculative assets instead of strengthening the broader ecosystem.
While people celebrated Gensler’s exit, it marked a turning point in the industry, with BTC only marginally going higher before entering a bear market. According to Cowen, now that some people are celebrating Jerome Powell’s removal as chair of the Federal Reserve, it is a sign that history could repeat itself. They celebrated it in the short term, which will mark a turning point in credibility for the Fed in a few years.
If the Fed becomes another cabinet within the executive branch, it may lead to a lack of trust in the institution. In a few years, participants will realize that markets were better off with Powell than without him.
Liquidity Sweeps Into FOMC Are Becoming A Familiar Setup
Bitcoin has shown a consistent pattern around Federal Open Market Committee (FOMC) meetings, and it’s not bullish in the short term. A crypto trader known as Max Trades that following the last seven FOMC meetings, BTC dropped sharply after each decision.
Q&A
What happened to Bitcoin's price after Gary Gensler left the SEC?
After Gary Gensler left the SEC in January 2025, Bitcoin's price dropped sharply from around $109,000 to about $75,000.
Why did Bitcoin's value decline following Gensler's departure?
The decline in Bitcoin's value is attributed to a loss of faith in the crypto industry and an increase in speculative investments, leading to a misallocation of capital.
How did Gensler's exit impact the regulatory environment for cryptocurrencies?
Gensler's exit did not lead to the expected favorable regulatory changes; instead, it seemingly opened the door for increased speculative behavior and less oversight in the crypto market.
