Approved Launch of 10 Cryptocurrency ETF by Bitwise Despite Unusual Stipulation
In a surprising turn of events, the U.S. Securities and Exchange Commission (SEC) has halted the launch of Bitwise's highly anticipated cryptocurrency index fund. The decision, announced on July 22, 2025, was made following an initial accelerated approval, only to be reversed hours later.
Assistant Secretary Sherry R. Haywood issued a stay under Rule 431, allowing the full Commission to review and suspend decisions pending further scrutiny. This move came despite the SEC’s initial finding that the proposal met regulatory requirements to prevent fraud and protect investors.
The SEC's decision to halt the launch has been met with criticism from some industry experts. Analyst Nate Geraci, of Bloomberg ETF, insists that both Bitwise's and Grayscale's ETFs should be allowed to convert or uplist as soon as possible. Scott Johnsson, general partner at Van Buren Capital, has referred to the SEC's actions as "funny business" that shouldn't happen under Chairman Gary Gensler's tenure, known as the Atkins era.
The Bitwise 10 Crypto Index Fund, set to trade on NYSE Arca as a "Trust Unit," includes a mix of top cryptocurrencies: Bitcoin (BTC), Ethereum (ETH), XRP, Solana (SOL), Cardano (ADA), Chainlink (LINK), SUI, Avalanche (AVAX), Polkadot (DOT), and Litecoin (LTC). Bitwise manages approximately $5.79 billion in assets across its 12 crypto ETFs, with its largest product being the spot Bitcoin ETF, which accounts for roughly $4.79 billion in assets under management (AUM).
The SEC's decision mirrors similar action taken with Grayscale’s Digital Large Cap Fund ETF conversion, indicating a cautious approach towards approving spot-based crypto ETFs beyond Bitcoin and Ethereum. The SEC's Commission has put a hold on the launch of Bitwise's cryptocurrency index fund under Rule 431 of the Commission's Rules of Practice.
The current status of the Bitwise 10 Crypto Index Fund is that its conversion to an ETF remains on hold pending full Commission review. Bitwise has not provided public clarification on the matter, and trading of the ETF conversion is effectively frozen until the SEC completes its comprehensive evaluation.
Meanwhile, James Seyffart, Bloomberg Intelligence ETF analyst, suggests the SEC may be stalling for time as it works on finalizing its generic listing standards due by October 2025. The SEC can independently review any decision made under delegated authority, as per Rule 431, without a set timeline for determining whether to uphold, amend, or reverse the decision.
As the situation unfolds, industry experts and investors alike are keeping a close eye on the SEC's decisions regarding cryptocurrency ETFs. The outcome could have significant implications for the future of the crypto market in the United States.
- The SEC's decision to halt the launch of Bitwise's cryptocurrency index fund under Rule 431 has sparked criticism from some industry experts.
- The Bitwise 10 Crypto Index Fund, which includes a mix of top cryptocurrencies such as Bitcoin (BTC), Ethereum (ETH), and others, now has its conversion to an ETF on hold pending full Commission review.
- The SEC's action also mirrors the approach towards approving spot-based crypto ETFs beyond Bitcoin and Ethereum, as seen in its decision regarding Grayscale’s Digital Large Cap Fund ETF conversion.
- As the SEC works on finalizing its generic listing standards due by October 2025, some analysts suggest that the Commission may be stalling for time with its review of Bitwise's cryptocurrency index fund, potentially having significant implications for the future of the crypto market in the United States.
