Jay Clayton, former Head of the SEC, says that there are now no reasons why a Spot Bitcoin ETF should not be approved.
The ex-chairman of the Securities and Exchange Commission was interviewed on CNBC Squawk Box on Monday and gave his views on the long-running saga of the SEC and Spot Bitcoin ETFs.
In order to give the whole picture of ETFs for Bitcoin, Clayton started by giving his thoughts on the first Bitcoin ETF filings back in 2015/16, when he believed that things were very different to what they are today. He mused on his thoughts at that time:
“This is an offshore, retail, nothing close to what I would say the core of our financial markets. At that time, if you look at trading of bitcoin, the emergence of bitcoin, it looked like stocks, but it was not anything like it.”
However, since that time, he admitted that things had changed drastically to the point that blue chip companies such as Blackrock were willing to back it. He commented:
“companies whose reputation in the market matters are saying ‘you know what, we think that trading, we think that the custody, we think that those protections around this market are sufficient, that we are willing to put our name on it’”
In Clayton’s view this was an “incredible development” and not one that he had expected. He had always been “sceptical” of bitcoin and said that studies had showed “90% wash trading, manipulation” and people “dumping”.
However, for him, what had really changed was when companies that “know the markets better than anybody” had moved into the space and had said that they are “willing to put their reputation behind it”.
On being asked if he thought that a Spot ETF should now be approved, Clayton said that when a Futures ETF had been approved, the protections for the investor had been in place, but this hadn’t been the case for a Spot ETF. Now though, he says that institutions have been arguing that the protections for a Spot ETF are there, and that it is actually “more efficient and less drag” for the investor than the Futures ETF.
When pressed on when he thought a Spot ETF might be approved, Clayton said that it would need to go through the regulatory process but if it was proved to have “similar efficacy” to a Futures ETF then it would be “hard to resist approval”.
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