Ex-SEC Attorney Dashes Hopes Of Spot Bitcoin ETF Approval, Here’s Why
Mentions of Spot Bitcoin ETFs have been constant in the crypto and traditional investment industries in recent months as many investors wait on the SEC’s decision. However, some players have constantly played down the possibility of Bitcoin spot ETFs taking root in the US market.
One of those who do not believe a Spot Bitcoin ETF will be approved is John Reed Stark and according to the former SEC attorney, investors probably shouldn’t hold their breath waiting for approval of a spot Bitcoin ETF anytime soon.
Chances For SEC Approval Of A Bitcoin Spot ETF Are Slim And None
John Reed Stark is a former SEC insider who served as the regulator’s chief of internet enforcement, and taking to his social media account to speak on the matter, Stark laid out several reasons why the SEC isn’t likely to approve a Spot Bitcoin ETF despite being available in other regions.
According to him, CNBC’s recent study on the industry shows that the crypto-marketplace is totally rigged. As such, the industry lacks regulatory oversight, transparency, insurance, licensure, net capital requirements, and effective consumer protections.
“Chances for SEC Approval of a Bitcoin Spot ETF Are Slim and None (And Slim Just Left Town),” Stark wrote.
The CNBC report quoted by Stark was published on August 2023 and the report shows researchers at the Network Contagion Research Institute found that tweets from Tesla CEO Elon Musk and Twitter bots helped pump the price of FTX-listed coins traded by Alameda Research.
The research, which studied over 3 million tweets from January 1, 2019, to January 27, 2023, showed tweets from Elon Musk caused prices of certain cryptocurrencies to spike by as much as 50% within one day.
BTC price resting above $26,000 | Source: BTCUSD on Tradingview.com
Stark utilizes these findings as proof for his contention that the industry is turning the victims of market manipulation into the perpetrators of that manipulation.
In his explanation, he also refers to the Greater Fool Theory, saying:
Even worse, the cryptoverse has transformed victims into victimizers, drafting and enlisting the mammoth social media horde to serve as unwitting soldiers of fortune (without even having the decency to pay their legions any compensation or military scrip).
Current Situation Of Spot Bitcoin ETFs
The SEC has approved several Bitcoin Futures ETFs, but repeatedly rejected applications for Spot Bitcoin ETFs. While skeptics like Stark believe the rejections will continue, other players have had a positive mindset.
According to Fundstrat co-founder Tom Fundstrat, approval of Spot Bitcoin ETFs could push the price of Bitcoin up to $150,000 or more, as it would pave the way for mainstream adoption and usher in a new wave of investors.
On the other hand, recent applications of Ethereum ETFs have been rumored to have a better chance of approval from the SEC.
Featured image from Unsplash, chart from Tradingview.com
