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SEC halts Bitwise Crypto Index ETF after initial approval
The U.S. Securities and Exchange Commission (SEC) has approved—but immediately suspended—Bitwise’s plan to convert its flagship Bitwise 10 Crypto Index Fund (BITW) into a spot exchange-traded fund (ETF), leaving industry observers confused about the agency’s regulatory stance.
The proposed ETF from Bitwise could become the first U.S. multi-asset crypto index fund to trade on a national exchange, reports CoinGape. The fund holds approximately $1.68 billion in assets and primarily tracks Bitcoin and Ethereum (about 90%), with smaller allocations in XRP, Solana, Cardano, Avalanche, Chainlink, Polkadot, SUI, and Litecoin. Coinbase Custody is set to safeguard the digital assets, while BNY Mellon will act as the fund’s administrator and cash custodian.
Fund structure and reasons for launch delay
The SEC-approved structure allows the ETF to operate similarly to traditional crypto funds using a “Creation Units” mechanism, enabling the issuance and redemption of large blocks of shares. Additionally, Bitwise has committed to keeping at least 85% of its portfolio in assets already approved for ETF trading, such as Bitcoin and Ethereum. The remaining 15% will include tokens like XRP and Solana, which have not yet received individual ETF approval.
Despite securing regulatory approval, the SEC cited Rule 431(e) to initiate further review, delaying the fund’s launch. A similar decision was previously made regarding the Grayscale Digital Large Cap Fund ETF, which also includes a broad array of crypto assets.
Industry reaction and SEC’s next moves
Critics quickly voiced their concerns. Nate Geraci, president of The ETF Store, called the SEC’s move “bizarre,” stressing that both Bitwise and Grayscale deserve immediate uplisting. He warned that the delay sends mixed signals to investors and undermines transparency.
The decision comes amid heightened crypto ETF activity within the SEC. The agency recently reviewed filings from major players such as Franklin Templeton, Fidelity, and Invesco Galaxy, and extended deadlines for new proposals involving SUI and ONDO tokens.
Until the review concludes, BITW shares will continue trading over the counter, leaving investors waiting for full market access.
Also read: JPMorgan eyes crypto-backed loans in major banking shift
This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.
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