The former chairman of the U.S. Securities and Exchange Commission (SEC) says that the approval of a spot market Bitcoin () exchange-traded fund (ETF) is bound to happen.
In a new interview on CNBC Squawk Box, former SEC Chair Jay Clayton that the approval of a spot market BTC ETF is inevitable as it’s obvious that the top crypto asset by market cap is not a security.
“It is clear that Bitcoin is not a security. It is clear that Bitcoin is something retail investors want access to, that institutional investors want access to, and importantly, some of our most trusted providers who are fiduciaries or have duties of best interest, want to provide this product to the retail public. So I think approval is inevitable. The dichotomy between a futures product and a cash product cannot go on forever.”
Last month, the SEC lost a legal battle against Grayscale over the rejection of the crypto firm’s application to create a spot market BTC ETF. The judge in the case ruled that the SEC must reconsider its position to remain consistent.
In the past, the SEC approved futures BTC ETFs but rejected numerous bids to create spot market BTC ETFs, which would grant retail investors access to BTC through a brokerage, much like precious metals.
According to Clayton, the fact that large financial institutions are setting up surveillance networks to monitor spot market BTC ETFs means that the SEC’s concerns for the safety of investors should be quelled.
“[Before], I held the view that we were uncertain whether cash trading was so easily manipulable that retail folks should not have access to it. There are now large institutions with surveillance mechanisms that are coming in and saying, ‘no, that’s not the case.’ We can rely on the efficacy of the cash market to a sufficient extent where we believe it’s a legitimate product.”
