Former SEC Chairman Jay Clayton was interviewed by CNBC yesterday and talked about the development process of Bitcoin and related ETFs. He said that if it can be proved that investment in the spot market is effective for investors, then the Bitcoin spot ETF will have the possibility of being approved.
Former SEC Chairman Talks About Bitcoin Spot ETFs
In an interview with CNBC, Jay Clayton said that when he was chairman of the SEC, he was skeptical about Bitcoin transactions and believed that 90% of the transactions in the market were wash trades and used to manipulate the market.
However, as time went on, the futures market was monitored, investors were adequately protected, and Bitcoin futures ETFs were approved.
But does this mean that the Bitcoin spot ETF should also be approved?
Jay Clayton said that the reason for making a distinction between the two in the past was that the above protection was not seen in the spot market. Currently, many institutions are arguing that these distinctions have disappeared and that investing in spot is more efficient for investors.
Jay Clayton did not object to the agencies’ statements, but said:
“If they can demonstrate that the spot market works similarly to the futures market, it would be hard to resist approving a Bitcoin ETF.”
Is Bitcoin's supervision sharing protocol the key?
However, the question is back to the starting point. How can these institutions prove that they can effectively prevent market manipulation? Will the SEC, led by Gary Gensler, buy in? This is the key to whether it can be passed.
Recently, many institutions such as BlackRock, Fidelity and Ark have resubmitted applications for spot ETFs. The similarity is that the application documents all indicate that they will sign a Bitcoin surveillance-sharing agreement with the spot trading platform operator and use Coinbase as the surveillance-sharing agreement partner for the spot ETF. The goal is to share information about market trading activities, clearing activities and customer identities through mutual cooperation, thereby reducing the possibility of market manipulation.
As the largest cryptocurrency exchange in the United States, it is reasonable for Coinbase to be invited as an agreement partner. However, Coinbase was sued by the SEC for violating securities laws in early June and is still involved in the lawsuit.
Whether this supervisory sharing agreement will become the key to the approval of spot ETFs remains to be verified by time.
