Gary Gensler endorsed ETFs — but now he’s backtracking.

The Bitcoin spot ETF is the first investment product that allows investors to gain direct exposure to the value of Bitcoin (BTC) through traditional, regulated investment products. It was the first Bitcoin-related investment product that the baby boomer generation knew and felt comfortable investing in.

The approval comes after a long-running lawsuit in which the D.C. Circuit Court ruled that the SEC was hypocritical in approving bitcoin futures ETFs but not ETFs. In a statement after the vote, SEC Chairman Gary Gensler made clear his displeasure with having to vote for ETFs. (Most ETF approvals, even those that consistently lose investors' funds after approval, are not accompanied by a statement from the chairman, much less prohibiting investment).

Related: Will Bitcoin Continue to Fall Because of ETFs?

This was the first time the SEC chairman had approved an ETF, and through his approval speech, he gave a speech advising people not to buy ETFs. That's inconsistent with the SEC's disclosure-centric mission.

Has the Bitcoin community won? Did we really beat Gary? Not very fast. Allow the Star Wars analogy. We are on the back end of the second film, Empire Strikes Back. The Bitcoin revolution is not going away as a financial prospect and a store of value, but Gensler is building the second death star as we speak.

Investment advisors and brokers must comply with the new rules adopted by the SEC in 2019, Regulation Best Interest (Reg BI), before advising their clients to buy a piece of Bitcoin spot ETF.

Reg BI is a Kafka-esque regulation that runs to hundreds of pages, the main points of which are adopted by the SEC are that advisers must comply with the duty of care and it also includes specific disclosure requirements.

A duty of care sounds good, but in this case it is a reprehensible proposition that is not fully defined in Reg Bi. Thus, investors may accuse their advisors of hindsight bias when their investment does not grow as expected.

If you're the politically minded SEC chairman to accommodate the singularly anti-Bitcoin Senator Elizabeth Warren, who forced President Biden to single-handedly appoint you in lieu of her decision to withdraw from the Democratic presidential nomination, you might be tempted. By abusing the substantive rulings opened by Reg Bi, those investment advisors and brokers regulated by Reg Bi are clearly dissuaded from advising their clients to invest in the new Bitcoin Spot ETF.

That statement is not a valid hypothesis. It's more predictable. it will be. Indeed, it has already begun to happen. Vanguard has told its clients that they are not allowed to invest in Bitcoin ETFs products listed on Fidelity and almost every other brokerage platform. This is because they are betting that the uncertainty of Reg BI will be misused to clearly discourage investment in this forum, which the SEC has been forced to open by the federal courts.

This is where Gensler responds to threats against investment advisers and brokers by SEC examiners and SEC enforcement staff. This is a tool of the bureaucracy that upholds the anti-Bitcoin ethos that flows from Gensler's Senate supporter in Senator Elizabeth Warren, who supports his role as SEC chair.

This SEC Chairman's short-term tactic doesn't matter much to native Bitcoiners who find the idea of ​​an ETF wrapping around Bitcoin outdated. It's just that baby boomers will be lagging behind in their efforts to grow their portfolios courtesy of Gary Gensler.

This article is not intended for general information purposes and should not be construed as legal or investment advice. The views, ideas and opinions expressed herein are solely those of the author and do not necessarily represent the views and opinions of Cointelegraph.