John Reed Stark Deems Bitcoin ETF Approval “Virtually Zero”

Bitcoin ETF VanEck Grayscale

John Reed Stark, an ex-official with the U.S. Securities and Exchange Commission (SEC), has intensified his doubts about the prospects of a Bitcoin exchange-traded fund (ETF) getting a nod. “The likelihood of the SEC approving a Bitcoin spot ETF? Almost non-existent,” he emphatically remarks.

Stark’s Bitcoin ETF Stance: A Critical Overview

On August 19, Stark expressed his views on X. He labeled cryptocurrency as a “hub of deception, scams, and manipulation.”

He specifically referenced a report from August 2. This report alleges that bots on the X platform artificially inflated crypto prices. This includes coins associated with Alameda Research, FTX’s affiliate, just before a significant downturn.

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Moreover, Stark highlighted how even a mere mention by high-profile figures, like Elon Musk of Tesla and SpaceX, can send altcoin prices soaring by up to 50% in 24 hours.

Crypto’s Transparency Issue: Stark’s Perspective

Stark leans heavily on such revelations to underline his main point. He believes the crypto industry currently lacks the necessary transparency.

“To accurately value it is a puzzle,” Stark notes, “There’s no solid grounding. No financial statements, income, tangible products, or established management.”

Furthermore, he emphasizes the regulatory void surrounding cryptocurrencies. He laments, “There’s no oversight, clear rules, or customer protection measures. Everything from insurance to licenses is missing.”

Interestingly, Stark had earlier hinted at the possibility of the SEC revisiting its stance on Bitcoin ETFs post the U.S. Election Day, slated for November 5, 2024.

The Financial Sector’s Anticipation: Awaiting the SEC’s Verdict

The industry is abuzz, speculating on the SEC’s potential moves. Major investment houses await the regulator’s judgment on their Bitcoin ETF applications.

BlackRock stands out among them. As the globe’s premier asset manager, it has a proven track record in successfully rolling out ETFs. Yet, despite its might and favorable odds, the SEC remains silent on their application.

On a related note, Cathie Wood, at the helm of ARK Invest, is optimistic. She opines that the SEC might green-light several Bitcoin ETF applications in one sweep. However, she predicts a quicker approval process for ETFs tied to Ethereum, the crypto giant trailing only Bitcoin in market capitalization.

The journey of Bitcoin ETFs is under intense scrutiny. Financial heavyweights, market spectators, and crypto enthusiasts are looking to the SEC for direction. The outcomes of these decisions will undeniably influence Bitcoin’s price trajectory and potentially reshape the financial landscape.

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