- Former SEC Chair, Jay Clayton, hints at the “inevitable” approval of a spot bitcoin ETF.
- The crypto market sees heightened anticipation following Grayscale’s legal victory against the SEC.
Spot Bitcoin ETF: The Path to Approval
The crypto universe is abuzz with anticipation as major cryptocurrencies like Bitcoin, Ethereum, and XRP could be ushering into a transformative phase. This sentiment is further intensified by Jay Clayton, the former U.S. Securities and Exchange Commission (SEC) chair, who recently projected that the approval of a spot bitcoin exchange-traded fund (ETF) is not a matter of ‘if’ but ‘when’. Such an ETF could open the crypto market to a staggering $15 trillion, reflecting a colossal shift in the asset landscape.
Crypto’s New Horizon: ETFs
Clayton emphasized in a CNBC interview that Bitcoin‘s identity as a non-security is unambiguous.
“Bitcoin is something both retail and institutional investors are eagerly eyeing, and some of our most reliable providers are intent on offering it,”
Clayton noted. He pointed out that the existing divide between futures and cash products isn’t sustainable.
To provide context, the SEC greenlit a Bitcoin futures ETF back in 2021. This move saw the crypto market, inclusive of Bitcoin, Ethereum, and XRP, peak at an astounding value just north of $3 trillion. Nevertheless, the SEC has now chosen to delay its decision on a barrage of spot Bitcoin ETF applications from financial behemoths, including BlackRock, WisdomTree, and VanEck, pushing these determinations to mid-October or later.
This heightened anticipation around spot Bitcoin ETFs was largely catalyzed by crypto asset manager, Grayscale’s legal triumph over the SEC. This victory saw a court challenging some of SEC’s reasons for declining spot Bitcoin ETF applications, terming them as “arbitrary and capricious.” The aftermath of this ruling saw Bloomberg Intelligence analysts adjust the odds of a spot Bitcoin ETF approval from 65% to a promising 75%.
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Recently, Grayscale urged the SEC to green-light the conversion of its Bitcoin trust into a full-fledged spot Bitcoin ETF. A sentiment echoed by Joseph Hall, a representative lawyer for Grayscale,
“The Commission should now see the merit in approving this product,”
he wrote, suggesting that the past acceptance of a futures Bitcoin ETF via the Chicago Mercantile Exchange should set a precedent.
Notably, a commentary by JPMorgan analysts conveyed that post Grayscale’s win, the SEC might be cornered into approving the pending spot Bitcoin ETF applications. In a similar vein, Bernstein analysts hinted that the green light for a Bitcoin ETF might be swiftly followed by one for Ethereum, indicating the broadening spectrum of crypto ETF opportunities.
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