Since 2017, the SEC has remained notorious for its denial of requests to approve spot Bitcoin ETFs. In 2021, when Gary Gensler became head of the institution, the same trend continued. The regulatory institution has always managed to delay, postpone or reject the approval of Bitcoin Spot ETFs. Currently, some believe the SEC could surprise the community by rejecting bitcoin spot ETF applications at the last minute.
The SEC has never approved a spot Bitcoin ETF: would it do so today?
When we take stock, no application for a spot Bitcoin ETF has ever received clearance from the SEC. The magic argument was always “the need to protect investors” because “cash products do not offer the guarantees offered”.
With this tradition and anti Bitcoin Spot ETF rhetoric, some are wondering if the regulator really intends to approve the currently pending Bitcoin ETF applications. This is the case of commentator Dave Nadig who wonders if the regulator would not be preparing a rug pull. A “rug pull” is the sudden removal of the support on which a person was resting.
Dave fears the SEC will surprise everyone by canceling Bitcoin ETF applications out of thin air. James Seyffart and Eric Balchunas, Bloomberg senior analysts and ETF specialists, answered his question.
90% chance of approval and 10% chance of rejection of spot Bitcoin ETFs
Faced with Dave Nadig’s question, Bloomberg ETF analyst James Seyffart admitted to having feared this possibility for weeks and months. For him, it would be “an epic move” from Gary Gensler. Analyst Eric Balchunas also claims that such a rejection would be “sadistic” and would provoke a salvo of legal action from companies.
While analysts think it is unlikely that the SEC will make a last-minute refusal, they acknowledge that this possibility cannot be ruled out. They claimed that the chances of approval of Bitcoin ETFs can be estimated at 90%, but no more. This means that the risk of the SEC rejecting applications can be estimated at 10%.
We must therefore hope that this last possibility does not materialize as indicated by the head of the SEC in response to these comments. Otherwise, the consequences on the community and on the crypto markets would be devastating.
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