It is surprising that the U.S. Securities and Exchange Commission has reversed an approval to convert the crypto index fund into an ETF. Bitwise’s application to transform its 10 Crypto Index Fund into an exchange-traded fund (ETF) was approved by the Securities and Exchange Commission. But within hours the decision was reversed by them.
On Tuesday, the SEC’s Division of Trading and Markets conditionally approved Bitwise’s crypto index fund to be transformed into an ETF. With this approval, Bitwise would have hastened the registration process. But, on the same day, SEC Assistant Secretary Sherry Haywood issued a stay order, stopping the approval for the commission’s review.
The Bitwise 10 Crypto Index Fund (BITW), launched in 2017, is a fund that tracks various digital assets, including Bitcoin (BTC), Ethereum (ETH), Solana (SOL), XRP, Cardano (ADA), and more. As of 30 June, the fund was allocated 78.72% in bitcoin and 11.10% in ether. Bitwise had made the application seeking to convert the fund into a multi-asset crypto ETF, which would have been the first such ETF in the U.S. This is similar to what was observed during the first pause of Grayscale’s Digital Large Cap Fund that had received initial approval. Experts think the SEC is delaying until it completes broader crypto ETF rules.
“Analysts such as James Seyffart at Bloomberg and Scott Johnsson at Van Buren Capital believe the filing could be a strategic political move to delay the 240-day deadline.” Some think the SEC will soon usher in uniform listing standards, which will become mandatory in normal listing.
At the same time, institutional demand for cryptocurrency ETFs is strong. In just 24 hours, Ethereum ETFs registered inflows of $533 million, while Bitcoin ETFs have over $154 billion in assets under management (AUM). More than seventy crypto-related ETF applications, including Grayscale’s, VanEck’s, and 21Shares’, are still waiting on final decisions from the SEC despite this appetite.
Conclusion
The SEC’s decision to withhold approval for the Bitwise Investment ETF held back Balderdash (BTC) Price. Despite rising institutional demand, the agency’s inconsistent stance is stalling further progress. As long as clear rules do not get established, all crypto ETFs, no matter how compliant, will be subject to change.
