Securities and Exchange Commission (SEC) Puts off Decision to Transform Bitwise Crypto Fund into Exchange-Traded Fund (ETF)

Securities and Exchange Commission (SEC) Puts off Decision to Transform Bitwise Crypto Fund into Exchange-Traded Fund (ETF)

In a move that was described as "expected" by Bloomberg ETF analyst James Seyffart, the U.S. Securities and Exchange Commission (SEC) has extended its decision deadline regarding Bitwise's proposal to convert the Bitwise 10 Crypto Index Fund into a spot exchange-traded fund (ETF) until July 31, 2025 [1].

The Bitwise 10 Crypto Index Fund, currently worth $1.4 billion, tracks the 10 most valuable and established cryptocurrencies by market cap, with monthly rebalancing of the basket. Bitwise, which already issues spot-based Bitcoin and Ethereum ETFs, had initially applied to launch an ETF based on the two largest cryptocurrencies by market cap in November [2].

The SEC's decision delay reflects internal regulatory caution and dissent regarding crypto ETFs, especially those containing altcoins like XRP, Solana, and Cardano, due to ongoing concerns about market manipulation, investor protection, and unresolved legal matters such as the SEC vs. Ripple case [3][4].

The SEC initially granted conditional approval to the ETF on July 22, 2025, but then swiftly halted the conversion hours later using Rule 431, which automatically stays the approval pending a full Commission review [2][3][4]. The fund continues to trade under the ticker BITW on the OTCQX market with Coinbase as custodian, but the ETF conversion remains on hold awaiting the Commission’s final determination by the end of July 2025 [1].

Meanwhile, the SEC's decision on another significant crypto ETF proposal, Grayscale's request to convert its mixed crypto fund into an ETF, has been extended to February 2, 2026 [1]. JPMorgan analysts have speculated that, if approved, exchange-traded products centered on Ripple's token could attract up to $8 billion in six months [5].

As of July 25, 2025, the SEC has yet to issue a public update on the status of Bitwise's application, leaving the crypto community in suspense [1][3][4].

| Aspect | Status/Details | |-------------------------------|------------------------------------------------| | Current Date | July 25, 2025 | | SEC Final Decision Deadline | July 31, 2025 | | Approval Status | Initially approved, then stopped under Rule 431 | | Reasons for Delay | Regulatory caution on altcoin inclusion, XRP legal uncertainties, market manipulation concerns | | Fund Status | Continues trading on OTCQX as BITW | | Custodian | Coinbase | | Other Notable Event | Grayscale's ETF request extended to February 2, 2026 |

Investors continue to watch the SEC's decision regarding Bitwise's proposal to convert the Bitwise 10 Crypto Index Fund into a spot Bitcoin ETF, given that Ethereum is also part of the fund's tracked cryptocurrencies. This delay in decision-making by the SEC, due to ongoing concerns about market manipulation, investor protection, and unresolved legal matters, could impact finance and investing in technology-based assets like Bitcoin and Ethereum.

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