Former SEC chair Jay Clayton says there’s no doubt whether the SEC will approve a spot Bitcoin ETF.
Former SEC chair Jay Clayton stated in a January 8 interview with CNBC that it is “inevitable” that the SEC will approve the first spot Bitcoin exchange-traded fund (ETF) for trading in the United States. Clayton believes that there’s nothing left to decide, indicating a change in the regulatory landscape.
Over the last decade, the SEC has consistently denied every application for a spot Bitcoin ETF, citing concerns related to potential market manipulation and fraud. However, Clayton now expresses that ETF approval is “imminent,” acknowledging significant improvements in the underlying market dynamics for Bitcoin over the past five years. This perspective aligns with a growing sentiment that the regulatory environment is becoming more favorable for the approval of a spot Bitcoin ETF in the U.S.
“Five years ago, there were wash sales, there was laddering, there were all sorts of things that you wouldn’t want to make available to the general public because of that risk,” he said.
Jay Clayton commended the SEC for reaching a point where it is comfortable with the disclosures related to Bitcoin ETFs from firms like BlackRock and Fidelity. According to Clayton, it is a significant step forward for the regulatory agency.
He also noted that, until recently, there hasn’t been a sufficient level of infrastructure to securely custody and make Bitcoin accessible to traditional financial market participants. This recognition of progress in both regulatory comfort and infrastructure suggests a positive shift in the environment for potential Bitcoin ETF approvals.
Bitcoin ETF is inevitable
Outside of crypto markets specifically, Clayton praised the development of blockchain technology for its ability to tokenize and trade real-world assets.
“This is a big step, not just for Bitcoin, but for finance generally. If you can tokenize underlying assets and trade that way. That’s a potential significant change across finance, not just in the ‘crypto space.’”
On January 8, several prospective Bitcoin ETF issuers submitted amended S-1 and S-3 filings to the U.S. Securities and Exchange Commission (SEC), disclosing the fees they intend to charge on their products once approved. This influx of amended filings is seen as a signal that the SEC is expediting its processes for the week.
Bloomberg ETF analysts James Seyffart and Eric Balchunas have expressed a high probability, estimating a 90% chance of a spot Bitcoin ETF approval by January 10. Seyffart mentioned in a January 9 post on X (formerly Twitter) that investors can anticipate further amendments to S-1 and S-3 filings in the coming days, following additional comments from the SEC.
1. This is true, comments came back on those S-1 documents with the fees that we all went crazy over this morning (this isn’t out of ordinary)
2. Expect to see more amendments tomorrow because of this
3. That said — I don’t think this is necessarily a delay signal https://t.co/o2m0lIBSct— James Seyffart (@JSeyff) January 9, 2024
Despite the back-and-forth of new amendments and comments, he said it was unlikely that these qualify as a “delay signal” for the ETFs.