Are Bitcoin ETFs headed for one epic Gensler ‘rugpull?’ Analysts weigh in
Although it's considered unlikely, Bloomberg's ETF analysts acknowledge the remote chance that SEC Chair Gary Gensler might be intentionally delaying his decision on the numerous pending spot Bitcoin ETF applications until the very last moment.
David Becker 
Bloomberg ETF analysts acknowledge that there is a remote possibility that Gary Gensler, the Chair of the United States Securities and Exchange Commission (SEC), might make an unexpected move regarding spot Bitcoin exchange-traded funds (ETFs). This idea was raised in a tweet on October 31 by ETF commentator Dave Nadig, who wondered if Gensler might be intentionally allowing a backlog of spot Bitcoin ETF applications to accumulate, only to reject them all simultaneously in what he called a "semi-comedic rug-pull."
In response to this speculation, senior Bloomberg ETF analysts James Seyffart and Eric Balchunas admitted that the notion had crossed their minds for some time. Balchunas even characterized such a scenario as "amazingly sadistic" and noted that it could potentially lead to a wave of legal actions.
However, both analysts consider this scenario to be unlikely, but they do not rule out the possibility of a last-minute denial, which is one reason why they hesitate to place the odds of approval for spot Bitcoin ETFs at anything above 90%.
The SEC's history of denying spot Bitcoin ETF applications dates back to 2017, and this trend has continued under Gensler's leadership since he assumed the role of SEC Chair in 2021. The SEC has consistently delayed, denied, or pushed back applications for spot Bitcoin ETF products, citing concerns about investor protection.
In June 2022, the SEC, under Gensler, faced a lawsuit from crypto asset manager Grayscale after rejecting its proposal to convert an existing Bitcoin trust into a spot ETF. The court ruled in favor of Grayscale, stating that the SEC's decision was "arbitrary and capricious." However, the SEC did not appeal this decision.
Up to this point, the SEC has only approved ETF applications for Bitcoin and Ether futures products, as it believes that spot products lack sufficient safeguards to protect investors from market manipulation.
