On July 10, 2023, former SEC Chairman Jay Clayton joined CNBC’s “Squawk Box” to discuss a range of topics, including cryptocurrency regulation, U.S.-China relations, and more. One of the key points of discussion was Clayton’s thoughts on the SEC’s potential future approval of a spot Bitcoin ETF proposal.
Clayton’s Views on Cryptocurrency Regulation
Clayton’s tenure as SEC Chairman saw the emergence and growth of cryptocurrencies, and his views on the subject are highly regarded. He noted the remarkable development in the crypto market, stating:
“Let’s go back to 2015-2016. This is an offshore, retail, nothing close to what I would say are the core of our financial markets. At that time, if you look at trading of Bitcoin, the emergence of Bitcoin, it looked like stocks, but it was nothing like it. Now we’ve seen development all the way to the point where companies whose reputation in the market matters are saying, ‘You know what, we think that trading, that the custody, those protections around this market are sufficient that we’re willing to put our name on it and offer that product.’ That’s actually an incredible development, not one I expected. I was very skeptical of trading in the Bitcoin market when I was the SEC Chair. I thought there were studies that 90% of it was washing trading, ripe for manipulation and the like…“
Spot Bitcoin ETF Proposal
The discussion then moved to the topic of a spot Bitcoin ETF.
“When the SEC approved the futures-based ETF, they said we see the protections in that market for the end investors that are sufficient, we don’t see them in the spot market, so we’re going to make that distinction. I think what the institutions are arguing is those distinctions have gone away, and now the spot product is less drag, more efficient for the investor. So, if there’s not that delta in efficacy, the spot should be approved.“
When asked about the timeline for the approval of a spot Bitcoin ETF, Clayton didn’t provide a specific timeframe but suggested:
“If they’re right, that you can demonstrate that the spot market has similar efficacy to the futures market, it would be hard to resist approving a Bitcoin ETF.“
Clayton also discussed U.S.-China relations, emphasizing the economic co-dependence between the two countries.
“We are in a place with where we are with China, we’re overly dependent on what I would say is a vicious competitor and somebody who on the world stage would like to displace us.“