SEC’s Sudden Reversal Pauses Bitwise ETF Conversion
The Securities and Exchange Commission (SEC) approved the conversion of the Bitwise cryptocurrency index fund into an exchange-traded fund, but then immediately halted the move. Analysts attribute this unexpected turn to political factors or the lack of clear listing rules for crypto ETFs.
Source: sec.gov
On July 22, the SEC's Division of Trading and Markets provided "fast track approval" for the Bitwise 10 Crypto Index to convert into an ETF. However, on the same day, SEC Assistant Secretary Sherry Haywood sent a letter stating that "the Commission will review the delegated action." The regulator may reconsider the decision.
Source: sec.gov
Bitwise's cryptocurrency index fund trades under the ticker BITW and includes exposure to various digital assets, including Bitcoin and Ethereum. The company filed to convert the fund into an ETF last November.
Grayscale replay
Bloomberg ETF Analyst James Seyffart reported on X (formerly Twitter) that Bitwise ETF has been “Bitwise has been stayed by either one or multiple commissioners,” meaning the company cannot actually convert the fund into an ETF yet.
We have approval of the @BitwiseInvest 10 Index fund -- $BITW -- but just like @Grayscale's $GDLC earlier this month, Bitwise has been stayed by either one or multiple commissioners. Meaning they cannot actually convert it into an ETF ... *yet* https://t.co/e037clB0kI pic.twitter.com/GQEdtIscar
— James Seyffart (@JSeyff) July 22, 2025
Nate Geraci, President of NovaDius Wealth Management, called it a "bizarre situation." He said it was similar to the delay in converting the Grayscale Digital Large Cap ETF, which was approved on July 1 but then quickly paused.
Other delays and plans to simplify listing
On July 17, the SEC also extended the decision deadline for in-kind redemptions for Bitwise's Bitcoin and Ethereum spot ETFs.
Bloomberg analyst Eric Balchunas believes that the SEC may wait until it develops listing standards for cryptocurrency ETFs.
I think they want to put out their generic listing standards first, which is probably coming soon. Get comments. Implement. in time October due dates. That’s my theory anyway.
— Eric Balchunas (@EricBalchunas) July 22, 2025
Journalist Eleanor Terrett reported on July 1 that stock exchanges, fund managers, and the SEC are exploring the possibility of simplifying the approval process for certain cryptocurrency ETFs.
🚨SCOOP: The @SECGov is in the early stages of creating a generic listing standard for token-based ETFs in coordination with exchanges.
The thinking, I’m told, is that if a token meets the criteria, issuers could skip the 19b-4 process, file an S-1, wait 75 days, and the…
— Eleanor Terrett (@EleanorTerrett) July 1, 2025
The SEC is sending mixed signals about crypto ETFs. On the one hand, the agency is considering simplifying approval procedures; on the other, it is suspending decisions that had already been made. The SEC's actions may reflect internal disagreements or a desire to create uniform standards for all crypto funds.
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