According to CNBC, at the Consensus Invest Conference in New York City recently, Clayton said:

What investors expect is that trading in the commodity that underlies that ETF makes sense and is free from the risk of manipulation. It's an issue that needs to be addressed before I would be comfortable.

Clayton primarily feels that a Bitcoin ETF would be too easily manipulated and that not enough safeguards are in place to prevent as much. This goes in line with ongoing actions and investigations by the federal government into Tether and Bitfinex, where they may ultimately allege that Tether was used to manipulate the moving price of Bitcoin as a whole.

Overall, the Bitcoin market is too nascent to have the sort of tools that the SEC would like to see at the disposal of its exchanges in order to approve an ETC, which would essentially be a method of investing in the entire Bitcoin market without holding Bitcoin.