The U.S. Securities and Exchange Commission (SEC) approved the conversion of Bitwise’s 10 Crypto Index Fund into an ETF on July 22, 2025, only to halt the process hours later. This SEC pause on Bitwise Crypto ETF highlights ongoing regulatory uncertainties in the cryptocurrency space, raising questions about the future of multi-asset crypto products.
SEC Pause on Bitwise Crypto ETF
The SEC initially granted accelerated approval for Bitwise to transform its over-the-counter fund (BITW) into a full-fledged ETF listed on the NYSE Arca.
However, invoking Rule 431 of the Securities Exchange Act, the agency issued a stay order, pausing the decision for a full Commission review.
This move echoes a similar delay with Grayscale’s Digital Large Cap ETF earlier this year, suggesting a pattern of caution toward funds exposing investors to a basket of digital assets beyond just Bitcoin and Ethereum.
Key Details of the Bitwise Crypto ETF
- Composition: The fund tracks the top 10 cryptocurrencies by market cap, including Bitcoin (BTC), Ethereum (ETH), XRP, Solana (SOL), Cardano (ADA), Sui (SUI), Litecoin (LTC), Polkadot (DOT), Chainlink (LINK), and Avalanche (AVAX).
- Significance: It would be one of the first ETFs to offer broad exposure to altcoins like XRP, potentially attracting institutional investors seeking diversified crypto portfolios.
- Timeline: Approval was fast-tracked, but the stay could extend indefinitely, with no set date for resolution.
- Market Reaction: XRP dipped around 6-9% following the news, reflecting investor jitters over regulatory roadblocks.
Reasons Behind the SEC pause on Bitwise crypto ETF
Analysts speculate internal politics, unresolved legal issues, such as the SEC’s past lawsuit against Ripple over XRP, or a need for clearer guidelines on crypto classifications may be at play. While not an outright rejection, the pause underscores the SEC’s methodical approach to protecting investors amid volatile markets.
This SEC delay on the Bitwise ETF could slow the influx of traditional capital into crypto, but it also paves the way for more robust frameworks. As the industry awaits clarity, such events remind us of the evolving regulatory landscape.
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