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2024 US Election Shapes SEC Policy on Bitcoin Spot ETFs

Former SEC official John Reed Stark and independent analysts suggest that the SEC’s stance on Bitcoin spot ETFs may not change until after the 2024 US Presidential Election.

Key Points

  • Former SEC official John Reed Stark predicts no approval for Bitcoin spot ETFs due to manipulation and vulnerability concerns.
  • Partisanship around crypto regulation rises at the SEC, shifting from a non-partisan topic to a contentious one.
  • Stark suggests post-2024 election changes: GOP win could reduce crypto-enforcement, open to ETFs, under “crypto-mom” Hester Peirce’s potential leadership.
  • 2024 US election pivotal for Bitcoin ETFs, impacting SEC’s cautious or crypto-friendly approach; Stark’s analysis highlights political influence.

According to the analysis conducted by John Reed Stark, former Chief of the SEC Office of Internet Enforcement and current President of John Reed Stark Consulting LLC, the United States Securities and Exchange Commission (SEC) is unlikely to approve any Bitcoin spot ETF applications in its present stance.

Stark points out concerns regarding market manipulation and the vulnerability of planned spot bitcoin-based exchange-traded products (ETPs). These concerns were also raised by independent analysts from Better Markets in comment letters submitted to the SEC on August 8th, 2023.

The Increasing Partisanship about Crypto Regulation at the SEC

Stark highlights the growing partisanship surrounding crypto regulation within the SEC. While cryptocurrency was previously considered a non-partisan subject, it has now become a contentious issue, particularly within the regulatory agency.

Stark suggests that the approach taken by the SEC towards Bitcoin spot ETFs could undergo a fundamental change after the 2024 presidential election in the United States. In the event that a Republican is elected president, Stark predicts the following actions by the SEC:

1. Significantly reduce efforts towards crypto-enforcement and focus primarily on combating fraud cases.
2. Become more open to the idea of authorizing a Bitcoin spot ETF and pursuing other regulatory measures that are favorable to cryptocurrencies.

This potential shift in direction could be further influenced by the potential appointment of “crypto-mom” Hester Peirce as interim Chair of the SEC. Stark believes that under Peirce’s leadership, crypto-related enforcement may come to a halt at the SEC.

Concluding Thoughts

The outcome of the 2024 US Presidential Election is expected to be a critical moment for the future of Bitcoin spot ETFs. It will determine whether the SEC continues its current cautious approach or adopts a more crypto-friendly stance.

John Reed Stark’s analysis provides valuable insights into the complex interplay between political dynamics and financial regulation.

As the election approaches, the crypto community and investors will closely monitor any indications of how the political landscape might shape the SEC’s decisions on Bitcoin spot ETFs.