Crypto investors still are not sufficiently protected in the $2 trillion market despite the success of the first bitcoin ETF, SEC chief Gary Gensler says

• The first-ever bitcoin-futures that launched on October 19 was a massive success.
• SEC Chair Gary Gensler on Monday voiced concern that crypto investors are still not well protected.
• His comments led to some speculation among observers on social media that he's still not keen on a spot bitcoin ETF.

The debut of the first-ever bitcoin futures ETF was a success last week, and signaled strong appetite from investors to gain exposure to the cryptocurrency. But on Monday, comments from US Securities and Exchange Commission Chair Gary Gensler caused some observers to speculate the top regulator was still no closer to approving a spot bitcoin fund, despite the success of the futures ETF.

Gensler told Yahoo Finance during its summit on Monday that the more than $2 trillion cryptocurrency space still needs additional regulation to ensure investor protection.

"Without that, I think that it's really, as I've said to others, a bit of the Wild West," Gensler said. "These markets, largely around the globe, 24 hours a day, seven days a week, don't have the similar protections against fraud and manipulation and front running and other abuses."

Those who invest in a bitcoin-futures ETF gain exposure via futures contracts rather than owning tokens outright. Even though some say that buying actual bitcoin is still the best way to invest in the asset, Gensler says regulators still are not in the loop enough to offer sufficient protection.

"Most of it has not come within an investor protection remit," Gensler told Yahoo, adding that crypto lacks the guardrails of the stock and bond markets.

Eric Balchunas, senior ETF analyst at Bloomberg, compared the SEC chair's recent comment as pouring "cold water" over the possibility of a spot bitcoin ETF.

"Seems like until the exchanges are overseen by regulators more, spot ETF filings are on ice for a while," Balchunas said in a tweet.

Nate Geraci, president of the ETF Store, a Kansas-based financial advisor, agreed.

"Based on these comments, tough to envision a spot bitcoin ETF being approved until crypto space is brought 'within the regulatory perimeter.' Gensler continues emphasizing need for investor protection under their purview," he said in a tweet.

The ProShares Bitcoin Strategy ETF debuted on October 19, becoming the first-ever bitcoin-futures ETF to be listed in the US and the second-most-traded fund launch of all time. The Valkyrie Bitcoin Strategy ETF launched on October 21 and another from Van Eck is due this week.