In a recent interview on CNBC’s “Last Call,” the former head of the Securities and Exchange Commission (SEC), Jay Clayton, shared his perspective on the future of Bitcoin exchange-traded funds (ETFs). He expressed strong confidence that the approval of a Bitcoin ETF is on an inevitable path, citing the resolution of various long-standing concerns.
During the interview, Clayton highlighted the multiple challenges that had previously impeded the approval of a spot Bitcoin ETF. He pointed to the fact that over 95% of Bitcoin trading had been associated with wash trading and other forms of manipulative trading, a significant issue that raised concerns among regulators. Additionally, the lack of access to high-quality data had further complicated the prospects for introducing such a financial instrument.
One prominent report that drew attention to these concerns was published by Bitwise Asset Management in March 2019. The report suggested that as much as 95% of reported Bitcoin trading volume on unregulated exchanges could be attributed to fraudulent activities such as wash trading. Bitwise presented these findings to the SEC as part of their application process for a Bitcoin ETF. Furthermore, questions regarding anti-money laundering protocols, know-your-customer (KYC) rules, and other regulatory matters remained unresolved.
However, Jay Clayton now believes that the Bitcoin market has matured, and many of these critical questions have been effectively addressed, paving the way for an eventual approval of a Bitcoin ETF.
This newfound optimism comes at a time when Bitcoin is experiencing significant momentum. The cryptocurrency recently surpassed the $35,000 mark, driven in part by a surge in Bitcoin ETF applications from major financial firms like Fidelity and BlackRock. According to a CoinShares report, Bitcoin funds captured a substantial 83.7% of the total $66 million invested in the last week. While alternative cryptocurrencies like Solana saw notable inflows, Ethereum faced outflows due to ongoing concerns about its future.
Furthermore, the ETHBTC ratio reached new yearly lows, underscoring Bitcoin’s growing dominance and positive market sentiment. These developments collectively signify that Bitcoin is currently experiencing a pivotal moment in the cryptocurrency space, with the potential approval of a Bitcoin ETF contributing to its ongoing success.