Bitcoin ETF approval could be ‘hard to resist,’ ex-SEC chair Jay Clayton says
Sufficient surveillance sharing agreements could convince the SEC to approve a spot Bitcoin ETF, according to the agency's former chair.
Clayton explained that the U.S. Securities and Exchange Commission (SEC) has previously chosen to reject spot Bitcoin ETFs while approving futures Bitcoin ETFs based on the latter’s surveillance sharing agreements and protections.
He suggested that this situation has changed, stating:
“I think what the institutions are arguing is that those distinctions have gone away, and now the spot product is actually less drag [and] more efficient for the investor … If they’re right … it would be hard to resist approving Bitcoin ETF.”
He did not predict when the SEC might approve a spot Bitcoin ETF but noted that the regulatory process has taken some time already.
Clayton’s comments are critical in light of the recent re-emergence of ETF applicants. BlackRock, the world’s largest asset manager, submitted its spot Bitcoin ETF proposal on June 15. Its filing was followed by applications from several other asset management firms, including Bitwise, WisdomTree, Invesco, Valkyrie, VanEck, and Fidelity.
The SEC has not yet approved any of those applications, and many of those applications were re-filed with changes in late June amidst reports of potential rejection.
Clayton comments on Bitcoin
During his appearance on CNBC today, Clayton also expressed surprise at the growth of Bitcoin (BTC) over the past several years.
He said that Bitcoin looked like the stock market in 2015 but was, in fact, “nothing like it.” He observed that the asset’s standing has changed as companies with significant reputations have decided that markets, custody, and protections surrounding Bitcoin are sufficient. Those firms are now willing to be associated with the digital asset, he said.
Clayton called this transition “pretty remarkable” and an “incredible development.” Furthermore, he said that he did not expect this development when he served as chair of the SEC between 2017 and late 2020. Clayton said that he was skeptical of institutional Bitcoin investment based on studies stating that 90% of trading involved wash trading and was based on apparent market manipulation and “dumping” by investors.
Clayton previously commented on other crypto developments during a Bloomberg event on June 8. There, he said that crypto regulation requires nuance and gave high praise to what he called “true” stablecoins with full asset backing.