In a dramatic turn of events, the U.S. Securities and Exchange Commission (SEC) first approved, then swiftly paused, Bitwise Asset Management’s proposal to convert its 10 Crypto Index Fund (BITW) into a spot exchange-traded fund (ETF). This unexpected reversal has left the cryptocurrency community and investors grappling for clarity.
The SEC’s Initial Approval
On July 22, 2025, the SEC’s Division of Trading and Markets granted an “accelerated approval” for Bitwise’s ETF conversion. This decision was seen as a significant milestone, as it would have marked the first multi-asset crypto index ETF in the U.S., offering investors diversified exposure to digital assets like Bitcoin (BTC), Ethereum (ETH), XRP, and Solana (SOL).
The Sudden Pause
However, just hours after the approval, SEC Assistant Secretary Sherry Haywood issued a stay under Rule 431, stating that the Commission would review the delegated action. This move effectively halted the ETF conversion process, leaving Bitwise and its investors in limbo. The SEC’s decision mirrored a similar action taken earlier with Grayscale’s Digital Large Cap Fund (GDLC), raising questions about the agency’s consistency in handling crypto ETF applications.
Investor Identification, Introduction, and negotiation.
Industry Reactions and Speculations
Industry experts have expressed confusion and concern over the SEC’s abrupt reversal. Some speculate that the SEC is delaying approvals to establish a comprehensive regulatory framework for crypto ETFs. Bloomberg ETF analyst Eric Balchunas suggested that the SEC might be stalling until it develops generic listing standards for digital assets, with a possible resolution expected by October.
Others believe the SEC’s actions reflect internal divisions and a cautious approach to integrating cryptocurrencies into traditional financial markets. Finance lawyer Scott Johnsson commented, “Both explanations are the kind of funny business that shouldn’t really be happening under [SEC Chair Paul] Atkins.”
Implications for the Crypto Market
The SEC’s decision has broader implications for the cryptocurrency market. It highlights the challenges asset managers face when attempting to launch crypto-based investment products in the U.S. market. The pause also underscores the regulatory uncertainty that continues to surround digital assets, potentially deterring institutional investors from entering the space.
Looking Ahead
As the SEC reviews its decision, the future of Bitwise’s ETF conversion remains uncertain. The cryptocurrency community is closely watching the situation, hoping for a resolution that will provide clearer guidelines for future crypto ETF applications. In the meantime, investors are advised to stay informed and exercise caution in the evolving regulatory landscape.
References
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SEC Approves, Then Pauses Bitwise’s ETF Conversion. Cointelegraph. (cointelegraph.com)
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SEC approves Bitwise’s crypto index ETF then immediately pauses it. The Block. (theblock.co)
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SEC approves Bitwise crypto index ETF with BTC, ETH, XRP, and Solana. Crypto Briefing. (cryptobriefing.com)
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SEC stays Bitwise crypto ETF launch despite approval. ETF.com. (etf.com)
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SEC approves then halts Bitwise $1.68B crypto ETF conversion for full review. Ainvest. (ainvest.com)
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Bitcoin News Today: SEC Halts Bitwise Crypto ETF Approval Under Rule 431 Sparking Regulatory Uncertainty. Ainvest. (ainvest.com)
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Bitcoin News Today: SEC Halts Bitwise Crypto ETF Conversion Post-Approval, Spurring Industry Criticism. Ainvest. (ainvest.com)
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SEC approves, immediately pauses Bitwise’s bid to convert BITW crypto index fund to ETF. XT.COM. (xt.com)
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SEC Pulls Plug on Bitwise Crypto Index Fund ETF Conversion. FX Leaders. (fxleaders.com)
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SEC Delays Decision on Bitwise Crypto Index Fund Conversion. CoinMarketCap. (coinmarketcap.com)
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SEC OKs Bitwise ETF, Then Reverses Within Hours. CryptoNews. (cryptonews.com)
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SEC approves Bitwise ETF, then pauses it. CryptoSlate. (cryptoslate.com)
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