Odds of Spot Bitcoin ETF Approval Watered Down by Former SEC Chief

The question of whether the United States Securities and Exchange Commission (SEC) will approve a spot Bitcoin (BTC) Exchange Traded Fund (ETF) has come up again two months after Investment management firm BlackRock and its counterparts submitted their applications for the offering. 

Spot Bitcoin ETF: the Hard Take

SEC’s former Office of Internet Enforcement Chief John Reed Stark shared his opinion about this possibility on X (formerly Twitter).

In his opinion, Stark believes that the current administration of the U.S. SEC is not likely to approve a spot BTC ETF due to some compelling reasons. He claimed that some of these reasons have been properly documented by experts from the non-partisan and nonprofit organization Better Market in their August 8, 2023 SEC Comment Letters. 

The letters in question were written in response to the numerous rule changes that were submitted by national securities exchanges to list and trade spot BTC Exchange Traded Products (ETPs).

Republicans May Change Crypto Outlook

On the other hand, the former SEC Chief believes that the trajectory of crypto regulation in the United States could change right after the elections. Stark is confident that if a Republican becomes the President of country next year, the SEC would have a change of heart towards the nascent cryptocurrency industry.

More importantly, the SEC veteran said the commission will “become far more receptive to approving a bitcoin spot ETF and far more likely to take other significant crypto-friendly regulatory actions.”

Having a Republican as the next president may trigger the resignation of Gary Gensler, the present Chair of the SEC, from the commission, per a statement from Stark. If this eventually happens, Hester Peirce, who is widely recognized as “Crypto Mom” in the industry, could take over as acting Chair. Stark believes that this change in leadership is strong enough to bring an end to the crypto crackdown from the SEC. 

Stark’s stance on a Republican administration in the U.S. is somewhat supported by Ron DeSantis’s recent campaign pronouncement. The current governor of Florida and Republican presidential candidate has been affirming his support for Bitcoin and his plan to protect the leading cryptocurrency when he wins the election.

Therefore, it is likely that approval for a spot BTC ETF may not be possible until 2024 when the election is wrapped up.