U.S. Securities and Exchange Commission Chairman Gary Gensler could take the “surprisingly sadistic” step of killing spot Bitcoin (BTC) exchange-traded funds (ETFs), according to Bloomberg ETF analysts.
In an Oct. 31 tweet directed at Bloomberg senior ETF analysts James Seyffart and Eric Balchunas, ETF commentator Dave Nadig asked whether Gensler might allow Bitcoin ETF spot applications to pile up just to get under the "semi-comedy rug." Reject all applications at once - pull. "
"I'm sure it's going to be more boring than that, but it does feel like it's all set up for Gensler's semi-comedy at times," Nadig said. In response to the comment, Seifert admitted that the idea of the situation had been "playing around" in his mind for weeks and even months. "It was absolutely epic for him though," he added.
Balciunas also chimed in, describing the potential pull as "surprisingly sadistic" and noting that it could "spark a wave of lawsuits" in response. However, while both analysts agree that this scenario is unlikely to happen, Balciunas admitted that a last-minute denial is not completely impossible - which is why he and Sefat are hesitant to increase the odds of approval above 90% part of the reason. Gensler’s own thoughts on a spot Bitcoin ETF have been in the spotlight recently, with a 2019 video showing Gensler describing the SEC’s stance on spot ETF products at the time as “inconsistent.”
The U.S. Securities and Exchange Commission (SEC) has a long history of rejecting Bitcoin ETF spot applications, a trend that began in 2017.
Gensler has continued that tradition since being named SEC Chairman in 2021. Since then, the Gensler-led SEC has delayed, denied or postponed all applications for spot Bitcoin ETF products, citing concerns about investor protection. In June 2022, the Gensler-led SEC was sued by crypto asset manager Grayscale for rejecting its proposal to convert an existing Bitcoin trust into a spot ETF, with a court ruling that the SEC’s rejection of the application was “arbitrary and capricious.” The SEC did not appeal the decision.
To date, the SEC has only approved ETF applications for Bitcoin and Ethereum (ETH) futures products, as it claimed that the spot products did not have adequate safeguards to protect investors from market manipulation.
