Former SEC Chair Believes Spot Bitcoin ETF Approval Is Imminent
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Former SEC Chairman Jay Clayton has expressed a positive outlook on the prospects of Bitcoin ETF applicants, indicating a strong potential for approval.
However, he refrained from specifying a timeframe or certainty regarding approving an exchange-traded fund for bitcoin.
A Positive Future for Bitcoin ETF Approval
The former U.S. Securities and Exchange Commission (SEC) chairman, Jay Clayton, recently stated that Bitcoin exchange-traded funds (ETFs) applicants stand a strong chance.
However, the approval is on the condition that the applicants can demonstrate their capability for a more efficient and effective way for investors to invest in the digital asset.
Clayton made these remarks during an appearance on CNBC on Monday.
He emphasized that if the spot market for $BTC proves to be as effective as the futures market, it would be difficult to resist approving a Bitcoin ETF.
Former SEC Chief Jay Clayton (CNBC):
– Applicants for a spot #Bitcoin #ETF have a great chance of approval if they can prove that this is a more efficient and effective way for investors to buy digital assets.
– The applicant companies need to show that the spot market has a… pic.twitter.com/T9g3S9XdTi
— Maxim Kovalev (@maximtrade134) July 10, 2023
The former SEC chair also reflected on his initial thoughts on the first Bitcoin ETF filings in 2015/16, noting that the crypto landscape has significantly changed.
Previously skeptical of $BTC due to manipulation and wash trading concerns, Clayton acknowledged that reputable companies like Blackrock have now supported cryptocurrency.
He considered this development unprecedented but remarkable, as these companies, with their extensive market knowledge, are willing to associate their reputation with $BTC.
When asked about the approval of a spot ETF, Clayton explained that investor protections were in place for a futures ETF but not for a spot ETF at the time.
However, institutions argue that the necessary safeguards exist for a spot ETF, which they believe is more efficient and less burdensome for investors than a futures ETF.
While Clayton did not offer a specific timeline for approving a spot ETF, he indicated that it would be challenging to resist approval if it demonstrated similar effectiveness as a futures ETF.
Although Clayton presided over the SEC’s rejection of previous Bitcoin spot ETF applications, he refrained from making any predictions regarding the eventual occurrence of a Bitcoin spot ETF.
Clayton, a senior policy advisor at the international law firm Sullivan & Cromwell, emphasized that the regulatory process would need to be followed before any potential approval could be granted.
However, the comments made by the former SEC chair have generated a fresh debate surrounding the prospects of a Bitcoin ETF and its potential impact on the cryptocurrency market.
BlackRock’s ETF Filing Propels Others
Following BlackRock’s filing in mid-June, several firms have submitted or resubmitted applications for spot products, hoping that the SEC would change its stance against allowing such funds.
BlackRock’s initial filing triggered competition among applicants to file similar proposals and improve the price rally in cryptocurrencies.
All the #Bitcoin Spot ETF filings that have been submitted, have been resubmitted. 🚀 pic.twitter.com/0Zj5RefGVP
— Mister Crypto (@misterrcrypto) July 5, 2023
BTC has had a growth rate of over 10% in the past month, and its overall price increase since the beginning of the year has exceeded 80%.
However, the SEC turned down applications due to insufficient transparency and worries about safeguarding investors from the unregulated spot market.
In light of this, BlackRock has now resubmitted paperwork to U.S. regulators via Nasdaq, providing additional details for its Bitcoin-focused exchange-traded fund.
On July 3, 2023, the exchange submitted new documents to the U.S. Securities and Exchange Commission.
The firm also revealed that Coinbase Global Inc. would offer market surveillance support for the proposed ETF.
This decision followed the SEC’s previous statement that initial filings by issuers lacked sufficient information.
Analysts noted that having crypto market surveillance is crucial for obtaining SEC approval for a spot Bitcoin ETF. Such surveillance measures could significantly reduce fraud and market manipulation.
These have been the primary reasons behind the SEC’s rejection of around 30 spot Bitcoin ETF applications thus far.
