Crypto Market Strengthens Significantly After Ripple Wins SEC Lawsuit

Previously, former SEC chairman Jay Clayton said regulators would find it difficult to refuse a spot Bitcoin exchange trading fund (ETF) if such a product performed the same function as a futures product.

Reporting from Yahoo Finance, Wednesday (12/7/2023), speaking in an interview with CNBC, Clayton said the SEC would have to see a spot product application would provide similar efficacy to the futures market to approve it.

He argues that despite being highly skeptical of Bitcoin trading when he was SEC boss, he now finds it extraordinary that major players in traditional finance would want to put their name on a spot Bitcoin ETF application.

BlackRock, the world’s largest asset manager, last month applied to the SEC for a spot Bitcoin ETF, leading institutional investors to pour money into the crypto industry.

ETFs are a type of investment vehicle that track the cost of an asset. Investors can buy gold, foreign currency, or crypto stocks through ETFs instead of owning the product themselves.

Spot Bitcoin ETFs are a hot topic right now because they don’t yet exist in America. Wall Street’s biggest regulator claims the price of Bitcoin can be manipulated making it reluctant to approve such products.

The SEC also claims applicants need to be clearer about how they manage supervisory sharing agreements that are meant to prevent fraud and manipulation by ensuring fund issuers monitor market trading activity, clearing activity, and customer identities.

BlackRock last week filed again with the SEC with a new proposal completing a supervisory agreement with Coinbase, America’s largest cryptocurrency exchange.

Investors want access to such Bitcoin ETFs because it allows them to engage with Bitcoin without having to deal with safeguarding the asset, according to experts.