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Shortly after approving the Bitwise 10 Crypto Index Fund conversion, the U.S. Securities and Exchange Commission paused the decision for a full Commission review. So, why is the SEC halting approvals?<\/p>\n
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On July 22, the SEC\u2019s Division of Trading and Markets granted<\/a> accelerated approval for Bitwise\u2019s proposal to convert its over-the-counter crypto index fund into a spot exchange-traded fund.<\/p>\n The move would have allowed the fund to list and trade on NYSE Arca under amended Rule 8.500\u2011E, which governs Trust Units. The approval was seen as a milestone for multi-asset crypto ETFs in the U.S.<\/p>\n However, later the same day, the SEC\u2019s Office of the Secretary issued<\/a> a notice stating that the Commission would review the delegated action.\u00a0<\/p>\n Under Rule 431 of the Commission\u2019s Rules of Practice, such a review results in an automatic stay. This means the approval is suspended until the full Commission decides whether to uphold, modify, or overturn it.<\/p>\n <\/p>\n The Bitwise 10 Crypto Index Fund, launched in 2017 and trading under the ticker BITW, is designed to track the performance of the ten largest crypto assets, excluding stablecoins and wrapped tokens.\u00a0<\/p>\n The fund rebalances monthly and, as of June 2025, held nearly 90% of its portfolio in Bitcoin and Ethereum. Other holdings included XRP, Solana, Cardano, Chainlink, Avalanche, Litecoin, and Polkadot.<\/p>\n Bitwise\u2019s goal was to convert BITW from an over-the-counter product into a regulated ETF, allowing broader investor access and potential fee reductions.<\/p>\n The approval would have permitted NYSE Arca to list shares of the Bitwise 10 Crypto Index ETF.<\/p>\n According to the SEC\u2019s order, the fund met key conditions, including holding at least 85% of its assets in digital commodities that already serve as the primary holdings of approved ETFs, such as Bitcoin and Ethereum.<\/p>\n Bitwise\u2019s goal was to convert BITW from an over-the-counter product into a regulated ETF, allowing broader investor access and potential fee reductions.<\/p>\n This is not the first time the SEC has taken such action. On July 1, the Commission\u2019s Division of Trading and Markets approved Grayscale\u2019s request to convert its Digital Large Cap Fund (GDLC) into an ETF.\u00a0<\/p>\n Just one day later, the Commission stayed the decision using the same Rule 431 process. Like BITW, GDLC holds a mix of Bitcoin, Ethereum, XRP, Solana, and Cardano.<\/p>\n The repeated use of Rule 431 to halt staff-level approvals has caused frustration among issuers, with Grayscale previously warning that the delay is harming investors. At the time, the issuer said<\/a> it may consider filing a petition to force the regulator to allow its fund to begin trading as soon as possible.<\/p>\n Bitwise has not yet commented on the latest pause.<\/p>\n According to experts like Van Buren Capital\u2019s Scott Johnsson, the SEC may have planned the reversals in advance, possibly anticipating opposition from Commissioner Caroline Crenshaw, who is widely known as a vocal crypto skeptic.<\/p>\nWhat is the Bitwise 10 Crypto Index ETF?<\/h2>\n
Why did SEC issue the stay order?<\/h2>\n