The U.S. Securities and Exchange Commission (SEC) approved a proposal to convert the Bitwise 10 Crypto Index Fund (BITW) into a spot exchange-traded fund (ETF) — but immediately placed the decision on hold. This move marks another twist in the evolving landscape of U.S. crypto ETF regulation.
Bitwise BITW ETF Approval Followed by Sudden Delay
Bitwise’s BITW fund, launched in 2017, manages over $1.68 billion in assets. It holds 90% of its weight in Bitcoin and Ethereum, while the rest is diversified across major altcoins including Solana, XRP, Cardano, Avalanche, Chainlink, Bitcoin Cash, Uniswap, and Polkadot.
The SEC’s temporary approval, followed by an immediate pause, reflects growing internal debate over how to handle multi-asset crypto ETFs. A similar scenario recently occurred with Grayscale’s Digital Large Cap Fund (GDLC), which received approval before being halted by the Commission.
Multi-Asset Crypto ETFs Face Regulatory Uncertainty
The SEC’s hesitation likely centers on tokens like XRP and ADA, which currently lack their own standalone spot ETFs. Without clear guidelines for these specific assets, regulators appear reluctant to greenlight index-style products that include them.
In an official statement, the SEC said it would “review the delegated action,” using the same language it applied when pausing Grayscale’s application. This signals a possible move toward standardizing the approval process for digital asset ETFs.
Crypto ETF Market Remains Active Despite Setbacks
Despite this pause, ETF activity in the crypto space is accelerating. Just this week, the SEC received filings from major financial institutions including Fidelity, Franklin Templeton, and Invesco Galaxy, each seeking to amend ETF structures or add new products tied to digital assets.
Bitwise’s proposed ETF would be the first diversified crypto index ETF in the U.S. if the pause is lifted and the product proceeds. However, concerns remain over the fund’s 2.5% expense ratio, which is considered high by ETF industry standards.
Outlook: More Clarity Needed from SEC on Crypto ETF Rules
As crypto markets mature, investors and asset managers are pushing for greater regulatory clarity. The SEC’s actions this week suggest progress — but also highlight ongoing uncertainty.
Until the Commission defines a consistent framework, multi-asset crypto ETFs may continue to face unexpected delays.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.