SEC Pauses Bitwise Crypto ETF Simply After Approval; What’s Behind the Shock Determination?

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The SEC accredited Bitwise’s 10 Crypto Index Fund conversion to an ETF then abruptly paused the choice. The fund could be the primary multi-asset spot crypto ETF within the U.S., overlaying BTC, ETH, XRP, SOL, ADA, and extra. Trade analysts suspect inside SEC battle and pending standardization as causes behind the sudden reversal. The U.S. Securities and Change Fee (SEC) stunned markets this week by approving the conversion of Bitwise’s flagship crypto index fund into an ETF, solely to freeze the approval hours later. The unprecedented transfer is elevating questions in regards to the regulatory physique’s inside processes and its true stance on crypto-based funding autos.

Bitwise ETF Approval Marks Milestone for Crypto The Bitwise 10 Crypto Index Fund (buying and selling below ticker: BITW) was set to develop into the primary U.S.-listed multi-asset spot cryptocurrency ETF , giving buyers publicity to a diversified portfolio of digital belongings in a single tradable product. The fund holds roughly 90% of its belongings in Bitcoin (BTC) and Ethereum (ETH) , with the rest allotted throughout eight main altcoins , together with XRP, Solana (SOL), Cardano (ADA), Avalanche (AVAX), Chainlink (LINK), Polkadot (DOT), Bitcoin Money (BCH), and Uniswap (UNI) .

On July 22, 2025, the SEC’s Division of Buying and selling and Markets granted accelerated approval for the itemizing below the amended NYSE Arca Rule 8.500-E. This gave Bitwise the inexperienced mild to launch what would have been essentially the most diversified crypto ETF but on the U.S. market.

The transfer would have adopted a rising pattern of institutional adoption of crypto ETFs, particularly after the approval of a number of Bitcoin and Ethereum spot ETFs earlier in 2025, which collectively attracted billions in belongings below administration.

Bitwise at the moment manages greater than $5.7 billion in crypto-related ETFs. Its spot Bitcoin ETF alone holds about $4.79 billion , whereas its Ethereum ETF tracks over $430 million in belongings. The conversion of BITW right into a broader crypto ETF was seen as a pure subsequent step and a milestone for crypto legitimacy in conventional finance.

Learn Extra: Bitwise Strikes to Launch Spot Aptos ETF as Value Surges

SEC Reverses Course with Sudden Pause Simply hours after granting approval, the SEC issued a keep order , successfully freezing the itemizing of the Bitwise ETF till additional discover. A letter from Assistant Secretary Sherry R. Haywood confirmed that the fee would evaluation the delegated motion below Rule 431(e) , pausing the ETF’s launch.

This transfer instantly adopted the SEC’s newest remedy of Grayscale’s Digital Giant Cap Fund, the same multi-asset crypto providing that was granted preliminary approval solely to be placed on pause.

In each conditions, the regulator has largely relied on course of language (adopted by a failure to adequately clarify the whys) leaving trade consultants to take a position and fume.

Learn Extra: Ripple Drops Cross-Attraction in SEC Case, Bringing 4-Yr Authorized Saga Over XRP Token Gross sales to an Finish

What’s Behind the Sudden Reversal? In response to Bloomberg ETF analyst James Seyffart , the keep doubtless signifies inside disagreement amongst SEC commissioners or an absence of cohesive requirements for approving multi-asset crypto ETFs. Van Buren Capital accomplice Scott Johnsson went additional, calling it “humorous enterprise,” suggesting that the transfer might have been preemptively taken below delegated authority to sidestep anticipated objections from Democratic Commissioner Caroline Crenshaw , recognized for her crypto skepticism.

Some are satisfied that SEC is enjoying the ready recreation till it might develop a uniform itemizing requirement to crypto ETFs. In response to current regulation, each ETF utility ought to be submitted within the type of a brand new 19b-4, and in that case, its examination course of takes as much as 240 days. A brand new standardized course of, anticipated later in 2025 might considerably shorten timelines and cut back the SEC’s burden.

“They wish to put out their generic itemizing requirements first… Get feedback. Implement in time [for] October due dates,” Seyffart wrote on X.

Rising ETF Pipeline Displays Regulatory Shift The SEC’s docket is brimming with crypto ETF functions, signaling a possible regulatory shift . On the identical day Bitwise obtained its preliminary approval, the company additionally revealed updates on filings from Constancy , Invesco Galaxy , Franklin Templeton , and others, primarily in search of to amend redemption mechanics for his or her current Bitcoin and Ethereum ETFs.

In the meantime, a number of asset managers are pushing ahead with extra area of interest crypto ETF proposals . These embody merchandise tied to tokens like Sui (SUI) and ONDO , in addition to ETFs that observe real-world asset platforms .

Though the approval-and-pause technique has launched confusion, many analysts imagine the regulatory surroundings remains to be bettering . The truth is, Bloomberg’s Seyffart now locations 90–95% odds on the approval of spot ETFs for belongings like XRP, Litecoin, Solana , and Cardano earlier than yr’s finish.

Why This Issues for the Crypto Market The rollercoaster determination relating to Bitwise’s ETF underscores the unsure however evolving stance of U.S. regulators on crypto. Whereas the SEC seems more and more open to mainstream crypto merchandise, it additionally appears hesitant to maneuver ahead with no unified method , particularly as crypto tokens develop into extra various and complicated.

For buyers and establishments, this incident highlights two key takeaways:

Crypto ETFs are coming however not with out regulatory friction.The SEC is strolling a tightrope between enabling innovation and sustaining management. If finalized, Bitwise’s ETF would symbolize a significant step ahead in bringing multi-asset digital publicity to retail and institutional buyers alike. However for now, the destiny of the fund stays in regulatory limbo , and all eyes are on the SEC for its subsequent transfer.

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