SEC’s Approval of Spot Bitcoin ETF May Be Inevitable! What is the Fundamental Reason for This?

• Former SEC Chairman Jay Clayton expressed a high optimism that the first spot Bitcoin Exchange-Traded Fund (ETF) approval is likely to happen in the US.
• This optimism arose from the recent court decision allowing Grayscale to convert its GBTC Bitcoin Trust into a spot ETF, potentially paving the way for the first spot Bitcoin ETF.
• This confidence stems from the fact that major financial institutions such as BlackRock, Fidelity, and Ark Invest have developed a strong trust in cash transactions in the crypto asset space.

SEC has issued a delay decision for all spot Bitcoin ETFs, but it may be inevitable for the SEC to approve spot Bitcoin ETF applications.

SEC May Approve Spot Bitcoin ETF

Former Securities and Exchange Commission (SEC) Chairman Jay Clayton expressed a high optimism that the first spot Bitcoin Exchange-Traded Fund (ETF) approval is likely to happen in the US. Clayton’s view is based on several important factors shaping the market landscape.

His statement on the CNBC Squawk Box program on September 1 coincided with an optimistic period in the cryptocurrency market. This optimism arose from the recent court decision allowing Grayscale to convert its GBTC Bitcoin Trust into a spot ETF, potentially paving the way for the first spot Bitcoin ETF. However, it is important to note that the Bitcoin price has not yet responded with an upward trend to this significant development.

The former SEC Chairman expressed a strong belief that the approval of a spot ETF is almost certain given the current conditions. This confidence stems from the fact that major financial institutions such as BlackRock, Fidelity, and Ark Invest have developed a strong trust in cash transactions in the crypto asset space. Clayton emphasized that these companies effectively eliminate manipulation concerns in crypto trading. He also stated:

“It is clear that Bitcoin is not a security. This is something retail investors want to access, and importantly, it is a fact that our most trusted providers want to offer this product to the retail public. Approval is inevitable.”

Grayscale’s Lawsuit

The US Court of Appeals for the District of Columbia Circuit ruled in favor of Grayscale on August 29, 2023, in its case against federal regulatory agencies. This decision marks a major turning point in the crypto market landscape by opening the path for the conversion of the company’s Bitcoin Trust (GBTC) into a spot Bitcoin ETF.

Currently, Bitcoin is trading at $25,816. It experienced a 0.80% decrease during the day and a slight 0.90% decrease over the past week.