Jay Clayton, the former SEC chair, expressed his opinion during an interview with CNBC on Monday. He said that if applicants can demonstrate efficacy and have market surveillance agreements, such as those with Coinbase, it would be difficult for the SEC to deny a spot Bitcoin ETF.
The SEC has so far denied all the applications for a spot Bitcoin ETF that have come before it, but Clayton believes now might be the time for the regulator to give approval. He stated, “If they’re right that the spot market has similar efficacy to the futures market, it would be hard to resist approving a bitcoin ETF.”
The applicants have argued that the spot market has similar efficacy to the futures market; this, combined with the market surveillance agreements that firms such as BlackRock, Fidelity and others have with Coinbase, could lead to approval. Noting this, Clayton went on to say, “When the SEC approved a futures-based ETF, they said ‘let’s look at the futures market, we see the surveillance, we see the protections in that market for the investor, that are sufficient. We don’t see them in the spot market, so we’re going to make that distinction’. I think what the institutions are arguing is that those distinctions have gone away and that the spot product is now less drag, more efficient for the investor.”
If regulation and efficacy are the same, the SEC will have to approve a spot Bitcoin ETF for the US market. Analysts at $650 billion asset manager Bernstein have noted that the chances of approval are “fairly high”, and the crypto market has become increasingly optimistic ever since BlackRock filed its proposal in mid-June. This optimism has been highlighted by Bitcoin’s price hitting a year-to-date high of over $31,000 last month.
