Former SEC Chairman Predicts Inevitable Approval of U.S. Spot Bitcoin ETF
Former Chairman of the U.S. Securities and Exchange Commission (SEC), Jay Clayton, has expressed his belief that the United States will eventually approve a spot Bitcoin Exchange-Traded Fund (ETF). Clayton’s remarks came during an interview with CNBC, where he discussed the growing demand for a spot Bitcoin ETF among both retail and institutional investors.
“It is clear that Bitcoin is not a security. It is clear that Bitcoin is something that retail investors want access to, institutional investors want access to, and, importantly, some of our most trusted providers who are fiduciaries or have duties of best interest want to provide this product to the retail public. So I think […] an approval is inevitable,” Clayton confidently stated during the interview. “The dichotomy between a futures product and cash product can’t go on forever.”
While futures-based Bitcoin ETFs have been available in the United States, the SEC has remained cautious about approving a spot Bitcoin ETF. However, a recent ruling in the Grayscale vs. SEC case may bring about a change in this stance. The federal court ruled that the SEC’s justification for allowing Bitcoin futures-based ETFs while denying spot Bitcoin ETFs lacked substance. The court’s decision stemmed from the understanding that fraud and manipulation risks exist in both the futures and spot markets, given their tight correlation.
The court ruled that the SEC’s rejection of Grayscale’s proposal to convert its Bitcoin trust (GBTC) into an ETF was “arbitrary and capricious” because the agency failed to adequately explain the differing treatment of similar products. This ruling effectively means that if the SEC intends to reject Grayscale’s proposal again, it will need to provide fresh objections or reasons beyond the generic concerns of fraud and market manipulation in the spot Bitcoin market. On this matter, Clayton acknowledged the possibility of a new rejection based on novel reasons but admitted uncertainty regarding what those reasons might be.
In light of this development, the SEC recently announced that it would delay decisions on spot Bitcoin ETF proposals from several prominent firms, including BlackRock, Fidelity, and Invesco, until at least mid-October. Clayton, however, remains optimistic about the prospects of progress in this area, suggesting that the SEC could announce its decision by mid-October or take more time to deliberate.
The potential approval of a spot Bitcoin ETF in the United States has garnered considerable attention from both the cryptocurrency community and traditional financial institutions. A spot Bitcoin ETF would provide investors with a more direct exposure to the cryptocurrency market, potentially leading to increased adoption and investment.
In conclusion, Jay Clayton’s prediction of an inevitable approval for a spot Bitcoin ETF underscores the evolving landscape of cryptocurrency regulation in the United States. With recent legal decisions challenging the SEC’s stance on spot Bitcoin ETFs, the future of cryptocurrency investment in the country holds the promise of exciting developments. As mid-October approaches, all eyes will be on the SEC for its decision, which could potentially reshape the cryptocurrency investment landscape in the United States.
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