The Approval Of Spot Bitcoin ETF is Inevitable – Says Former SEC Chairman Jay Clayton

A federal court has recently ruled against the U.S. Securities and Exchange Commission (SEC), stating that its refusal to permit Grayscale’s Bitcoin Trust conversion into a spot Bitcoin ETF was wrong.

Following the ruling, JPMorgan issued a statement indicating that the SEC would likely be compelled to approve pending spot Bitcoin ETF applications, including Grayscale’s. They think it would be awkward for the SEC to allow one type of Bitcoin investment and deny another.

Former SEC Chairman Responds

Jay Clayton, the former SEC Chairman, told CNBC that the approval of a spot Bitcoin ETF is inevitable. “It is clear that Bitcoin is not a security…an approval is inevitable,” he opined. Clayton added that the inconsistency between allowing futures products while denying spot-based ones can’t go on forever. He also said that Bitcoin is neither a security nor a traditional investment vehicle but is an asset that has captured considerable interest from both retail and institutional investors.

ETFs as a Gateway: Implications for Mainstream Adoption

Exchange-traded funds (ETFs) have long been viewed as a bridge between conventional financial markets and the rapidly evolving crypto space. Prominent asset management firms like BlackRock, Fidelity, and Invesco are also awaiting the SEC’s verdict on their respective spot Bitcoin ETF applications. However, analysts at JPMorgan cautioned that despite the significance of the likely approvals, spot Bitcoin ETFs may not result in immediate market upheavals, citing lackluster interest in similar products in Canada and Europe.

The SEC has postponed decisions on spot Bitcoin ETFs until at least mid-October. While it could signal an organized approach to multiple approvals, it leaves room for further delays. The court ruling has essentially forced the SEC to reevaluate its previous rejections, setting the stage for a crucial period in the U.S. financial regulatory environment.