In a surprising turn of events, the U.S. Securities and Exchange Commission (SEC) approved the conversion of Bitwise’s 10 Crypto Index Fund into an exchange-traded fund (ETF)—only to pause it within hours.
Bitwise, known for its diversified crypto exposure through the BITW fund (which includes assets like Bitcoin and Ethereum), received accelerated approval from the SEC’s Division of Trading and Markets. This move would have allowed Bitwise to bypass the typical timeline and fast-track its ETF launch.However, on the same day, SEC Assistant Secretary Sherry Haywood issued a stay on the approval, stating that the Commission would review the delegated action. This unexpected halt has left the ETF in limbo.
Through a tweet, Bloomberg ETF analyst James Seyffart confirmed that the decision was “stayed by either one or multiple commissioners,” adding that the original approval deadline wasn’t until next week. The SEC’s early action followed by a sudden reversal has sparked widespread confusion.
Speculation behind the pause
Some experts have compared the situation to the recent delay in Grayscale’s ETF conversion, which was also initially approved before being frozen. In a tweet,Nate Geraci, president of NovaDius Wealth Management, called the Bitwise reversal “bizarre.” Scott Johnsson, general partner at Van Buren Capital, suggested in a post on X that the Bitwise ETF was approved through delegated authority possibly as a strategic move by the SEC to avoid interference from its only Democrat commissioner, Caroline Crenshaw, who may have opposed the approval.
Johnsson also theorized that the SEC, now under Chair Paul Atkins, may have paused the approval as a tactic to bypass the 240-day deadline required for final decisions. He described both possibilities as questionable practices that shouldn’t occur under Atkins’ leadership.Meanwhile, Bloomberg ETF analyst Eric Balchunas said he believes the SEC may be stalling until it releases a formal listing framework for crypto ETFs.