- Former SEC Chairman Jay Clayton anticipates inevitable approval of a spot Bitcoin ETF in the United States.
- A recent court ruling stated that the SEC’s rejection of Grayscale’s spot Bitcoin ETF proposal was “arbitrary and capricious,” challenging the SEC to formulate fresh objections if they want to deny similar applications.
The End of a Dichotomy: Why a Spot Bitcoin ETF Approval Is Inescapable
Jay Clayton, the former Chairman of the U.S. Securities and Exchange Commission (SEC), recently shared his expert opinion that the United States is on an irrevocable path toward approving a spot Bitcoin Exchange-Traded Fund (ETF). During an interview with CNBC, Clayton argued that the bifurcation between futures-based and spot-based Bitcoin products is unsustainable in the long run.
🚀 Former SEC Chairman Jay Clayton predicts the approval of a spot Bitcoin ETF is inevitable! 📈 The SEC might make the announcement in mid-October, or it could take a bit longer, but progress is on the horizon for crypto enthusiasts. 🪙💼 #BitcoinETF #Bitcoin #BTC pic.twitter.com/PdRD4cBWNj
— Collin Brown (@CollinBrownBTC) September 4, 2023
The Fundamentals: Bitcoin’s Ascension to Mainstream Finance
According to Clayton, Bitcoin has definitively established itself as a financial instrument that both retail and institutional investors crave access to. Moreover, fiduciaries and financial entities operating with a duty of “best interest” are eager to offer this kind of product to the general public. Clayton stated,
“It is clear that Bitcoin is not a security… an approval [of a spot Bitcoin ETF] is inevitable.”
Clayton’s comments have been further substantiated by a federal court ruling earlier this week in the case of Grayscale vs. SEC. The court asserted that the SEC’s denial to convert Grayscale’s Bitcoin Trust (GBTC) into a spot Bitcoin ETF was “arbitrary and capricious.” The ruling spotlighted the SEC’s incongruity in permitting futures-based Bitcoin ETFs while rejecting spot Bitcoin ETFs, particularly when both types of products present similar market risks.
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The court contended that fraud and market manipulation risks are equally applicable to both futures and spot Bitcoin markets, given their strong correlation. This decision now compels the SEC to reevaluate Grayscale’s application—and potentially others—on new grounds if it wishes to maintain its rejection.
In the wake of the court’s decision, other financial powerhouses have voiced similar sentiments. Notably, JPMorgan recently stated that, following Grayscale’s legal victory, the SEC would find it increasingly difficult to deny pending spot Bitcoin ETF applications from other asset managers, including industry heavyweights like BlackRock, Fidelity, and Invesco.
Adding a timestamp to the anticipation, Clayton revealed that while the SEC has delayed the decision on spot Bitcoin ETFs until mid-October, he expects
“progress on this going forward.”
With institutional demand surging and legal precedent challenging previous regulatory hesitations, the gates seem set to open for a spot Bitcoin ETF in the United States—sealing its transition from a disruptive asset to a staple of modern finance.
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