U.S. Securities and Exchange Commission Chairman Gary Gensler could take “shockingly sadistic” action and eliminate spot Bitcoin (BTC) exchange-traded funds, 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.
I’m sure it would be more boring than that – but at times it does feel like it’s all set up for Gensler’s semi-comedy pull.
— Dave Nadig (@DaveNadig) October 30, 2023
Responding to the comment, Seifert admitted that the idea of the situation had been “wandering” in his mind for weeks and even months. “For him, it was absolutely epic,” Seifert 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 believe this scenario is unlikely to happen, Balciunas admitted that a last-minute denial is not completely impossible, which is why he and Sefat will not increase the likelihood of approval to 90 % above.
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Gensler’s own thoughts on spot Bitcoin ETFs 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.”
Meanwhile, the U.S. Securities and Exchange Commission (SEC) has a long history of rejecting spot applications for Bitcoin ETFs, a trend that began as early as 2017.
Gensler has continued this tradition since being appointed SEC Chairman in 2021. Gensler has since delayed and postponed its recent spot Bitcoin ETF application, citing concerns over investor protection.
In June 2022, the SEC led by Gensler was sued by crypto asset management company Grayscale for rejecting its bid to convert an existing Bitcoin trust into a spot ETF. The court ruled 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.
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