Former SEC Chair Says Spot Bitcoin ETF “Is Inevitable”

Jay Clayton on Bitcoin ETFs

The quest to bring the first spot Bitcoin exchange-traded fund (ETF) to the United States continues, with several notable individuals weighing in on the prolonged delay from the U.S. Securities and Exchange Commission (SEC).

The latest to share his thoughts on the subject is former SEC chair Jay Clayton. In a Friday interview with media outlet CNBC, the former SEC chairman stressed that approval of the financial product is sure to come. He told listeners:

“It is clear that Bitcoin is something that retail investors [and institutional investors] want access to . . . An approval of [a spot Bitcoin ETF] is inevitable. a dichotomy between a futures product and a cash product can’t go on forever. That’s the path where we are in.”

Jay Clayton’s comments on the potential for a Bitcoin ETF are noteworthy, given that while in office, the U.S. SEC denied a number of applications to launch such a product.

In recent times, however, Clayton has publicly supported the idea of a spot Bitcoin ETF, especially after the SEC gave the green light for financial institutions to offer trading on futures-based Bitcoin ETFs.

Approving a spot Bitcoin ETF would be slightly different as it would mandate investment companies to buy bitcoins to back issued shares. In contrast, a futures ETF, while tracking the price of BTC, only supported the purchase of BTC futures contracts, instead of underlying bitcoin.

A regulated spot Bitcoin ETF is considered by industry experts to be the best way for institutional investors to gain exposure to the largest cryptocurrency, without the rigors of custodying the asset or managing it directly. 

Clayton admits in his latest interview that there are now investment companies with “surveillance mechanisms” put in place to ensure the efficacy of the financial product while it awaits approval.

Will the SEC Decide in 45 Days?

Earlier this week, investment company Grayscale locked in the approval of a U.S. federal court to launch its spot Bitcoin ETF. The court urged the SEC to give its consent to the company’s application.

Notably, other investment companies, such as BlackRock, Fidelity, and WisdomTree, have all applied with the SEC to launch similar products. While the financial regulator has yet to give a green light to any of the applications, the agency has a 45-day duration to give one, as indicated in its delay of one of the applications.

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