• Former SEC Chair Jay Clayton believes a Bitcoin ETF in the US is inevitable due to improved market conditions.

• SEC sees an influx of Bitcoin ETF applications, with analysts predicting a 90% chance of approval by January 10th.

Former Chairman of the United States Securities and Exchange Commission (SEC), Jay Clayton, has boldly declared that the approval of a spot Bitcoin (BTC) Exchange-Traded Fund (ETF) in the United States is now inevitable. In an exclusive interview with CNBC, Clayton expressed his conviction that the SEC will soon greenlight the first spot Bitcoin ETF for trading in the country. 

This announcement comes after a decade of SEC rejections, primarily due to market manipulation and fraud concerns. However, Clayton’s newfound optimism is grounded in the remarkable transformation of the Bitcoin market over the past five years.

The SEC has consistently denied applications for spot Bitcoin ETFs for years, citing fears of market manipulation and fraudulent activities. Yet, the tide appears to be turning, as former SEC Chair Jay Clayton believes approval for a Bitcoin ETF is imminent. He acknowledged that the landscape of Bitcoin has undergone significant improvements in recent years.

Clayton pointed out that issues like wash sales and laddering, posed substantial risks to the general public five years ago. Today, the situation is vastly different, with improved market dynamics and enhanced safeguards.

Regulatory Comfort with Bitcoin ETF Disclosures

One crucial factor in this shift towards approval is the SEC’s growing comfort with the disclosures made by financial giants such as BlackRock and Fidelity regarding Bitcoin ETFs. These disclosures have played a pivotal role in changing the SEC’s perspective on the cryptocurrency market.

Additionally, Clayton applauded the development of infrastructure for the secure custody of Bitcoin. Until now, there has been a lack of adequate mechanisms for traditional financial market participants to safely store and access Bitcoin. These recent advancements have paved the way for a more secure and accessible Bitcoin market.

Influx of Bitcoin ETF Applications and Predictions

On January 8th, a flurry of amended S-1 and S-3 filings from prospective Bitcoin ETF issuers inundated the SEC. These filings revealed the fees these issuers intend to charge once their products are approved. Analysts from Bloomberg ETF, James Seyffart and Eric Balchunas, noted that the influx of amendments suggests accelerating the approval process. They estimated a 90% probability of a spot Bitcoin ETF approval by January 10th.

Seyffart also hinted at the possibility of further amendments to S-1 and S-3 filings following additional comments from the SEC. Despite these back-and-forth exchanges, he emphasized that these developments are unlikely to be interpreted as delay signals for the ETFs.

Countdown to Approval

Jay Clayton’s statements come just days before the SEC’s January 10th deadline, which could potentially see the approval of multiple spot Bitcoin ETF applications. Several prominent companies, including Invesco, VanEck, WisdomTree, and others, have submitted their applications. If these applications gain approval, they could pave the way for broader adoption of cryptocurrencies across the United States.

Clayton highlighted the significance of this development, not only for Bitcoin but the entire financial industry. The ability to tokenize underlying assets and trade them can bring about significant changes in finance, transcending the realm of the crypto space.

Gensler’s Caution and Speculation

Gary Gensler, the current SEC Chair, recently issued warnings about investing in cryptocurrencies, suggesting they could be considered securities. His statements have fueled speculation that at least one spot Bitcoin ETF will receive approval in the coming days.

Gensler emphasized that those offering crypto asset investments or services must adhere to applicable laws, including federal securities laws. He cautioned investors in “crypto asset securities” to be aware that they might lack key information and essential protections in their investments. Moreover, he warned of the prevalence of fraud and scams in the crypto space, which continues to be a challenge for the industry.

Coinciding with the anticipation of SEC approval for spot Bitcoin ETFs, Bitcoin’s price surged past $46,000 on a recent trading day, registering a 24-hour increase of 6%. This price increase reflects the growing optimism within the cryptocurrency community regarding the potential breakthrough in the US market.