• Former SEC Chair Jay Clayton believes a Bitcoin spot ETF could get approved if financial institutions can prove the product would mimic the conditions of the Bitcoin futures market.
• The SEC has yet to approve any US Bitcoin spot ETF applications, though it did greenlight the first Bitcoin futures ETFs in October 2021.
• Clayton says if financial institutions can prove that the spot market is similar to the futures market, it would be hard to resist approving a Bitcoin ETF.
SEC’s Approval of Spot Bitcoin ETF
The U.S Securities and Exchange Commission (SEC) has yet to approve any US Bitcoin spot exchange-traded fund (ETF) applications, despite submissions from several firms. However, former chair of the SEC, Jay Clayton, believes that such an approval might be possible if financial institutions can demonstrate that a proposed product mimics conditions of the existing Bitcoin futures market.
Clayton’s Opinion on Spot BTC ETF
In an interview with CNBC, Clayton outlined why he believed that the SEC initially approved those BTC futures ETFs rather than spot products. He said that when such products are examined by regulators, they need to be sure that there are sufficient safeguards and surveillance for end investors in place before making their decision. Furthermore, he added that financial institutions must argue that distinctions between spot and future markets have been eliminated and now there’s more efficiency in using spots instead for investors’ benefit. If these points are proven true by them then a BTC spot ETF will likely get approved according to him.
SEC’s Greenlighting of Futures Product
Last October saw approval from the SEC for launch of first ever Bitcoin futures ETFs which prompted many observers to question why no similar action had been taken regarding spot products up until then . In response to this inquiry , Clayton explained how at time of approval , commissioners felt as though protections offered in future markets were not present in case of spots hence resulting different outcome .
Arguments Required To Be Successful
For successful launch or acceptance of a bitcoin spot etf , proponents must first provide proof about similarities between both markets so as to satisfy regulatory criteria set by authorities . This was confirmed by Clayon himself who mentioned how it would become difficult for officials deny acceptance provided claims made were accurate .
Conclusion
It is clear from discussion above that successful introduction of a bitcoin spot etf depends upon ability of applicants to provide valid arguments regarding uniformity between current future and proposed products . Only then will they stand chance getting official go ahead from higher ups at sec .