Bitwise’s attempt to convert its 10 Crypto Index Fund into an exchange-traded fund (ETF) has hit an unexpected snag following an initial green light from the U.S. Securities and Exchange Commission (SEC). This approval, granted by the SEC’s Division of Trading and Markets on July 22, 2025, was halted a few hours later when Deputy Secretary Sherry R. Haywood announced a review of the decision, citing legal provisions under Rule 431. This delay mirrors a similar situation encountered by Grayscale’s fund, casting uncertainty on the crypto ETF landscape.
How Did Bitwise’s Plans Stumble?
Haywood’s letter expressed the SEC’s intention to thoroughly review the action, leaving the July 22 approval in suspension indefinitely. The measure comes amid talks of establishing standardized guidelines for listing cryptocurrency ETFs. With the approval temporarily on hold, Bitwise’s aspirations remain in limbo.
The SEC’s move to suspend Bitwise’s ETF conversion resonates with Grayscale’s similar attempt. Grayscale initially secured approval but faced suspension shortly after. Despite setbacks, Grayscale remains committed to completing the process.
What Are Experts Saying?
Industry expert Scott Johnsson from Van Buren Capital suggested that the SEC might have issued the initial approval, anticipating possible objections from Democratic Commissioner Caroline Crenshaw or as part of a larger strategic plan. Both outcomes, Johnsson warns, could result in unfavorable conditions for investors. James Seyffart of Bloomberg Intelligence echoed Johnsson’s view, postulating that the SEC may be using the delay as a buffer until a clearer regulatory framework is developed.
The SEC is reportedly crafting a new listing standard that aims to replace the protracted 19b-4 form process, which can take up to 240 days. This streamlined procedure is awaited eagerly by applicants like Solana and Dogecoin, with related decisions expected by the upcoming fall season.
Drawing specific insights from this development:
- Bitwise’s ETF conversion now faces an indefinite delay.
- The suspension parallels previous actions on similar approvals like Grayscale’s.
- Anticipated regulatory changes may expedite the approval process.
- Investment strategies may need adjustments given the uncertain timeline.
The current situation underscores the evolving dynamics within crypto regulation and the SEC’s cautious approach in evaluating ETF approvals. The outcome of this review will be pivotal for Bitwise and the broader cryptocurrency market, shaping how digital assets are integrated within traditional financial products.
