SEC: Crypto ETF Approved… Just Kidding! 🤪

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Right. So, the U.S. Securities and Exchange Commission (SEC), that bastion of predictable behavior, briefly, very briefly, considered letting Bitwise turn their 10 Crypto Index Fund into a spot exchange-traded fund (ETF). Then, apparently someone remembered they were the SEC and slammed on the brakes harder than a startled Vogon. This, naturally, has caused the usual level of confusion and mild existential dread in the digital asset product world. 🤷

Approved… Then Un-Approved. Hours Later.

On Tuesday, the SEC’s Division of Trading and Markets had a moment of what we can only assume was excessive optimism and initially gave the green light. Fast-track launch of the first multi-asset crypto index ETF in the U.S.? Yes, please! Or, well, *almost* yes, please. It was more of a “maybe, but don’t get your hopes up” kind of yes.

But then, because reasons, SEC assistant secretary Sherry Haywood announced the whole thing was “stayed until the Commission orders otherwise.” Which, translated from Bureaucratese, means “we’re thinking about it… again.” It’s remarkably similar to what they did to Grayscale’s Digital Large Cap Fund. Coincidence? Probably not. The universe has a fondness for irony. 🙃

Bitwise’s Plans: Currently on Hold (Possibly Forever)

Bitwise had, in a fit of ambition, submitted their ETF conversion proposal way back in November. The idea was to take their Bitwise 10 Crypto Index Fund (BITW) and make it all official and regulated and ETF-y. The fund, launched in 2017, has a little bit of everything – Bitcoin, Ethereum, even a smattering of Solana, XRP and Cardano. It’s basically a crypto lucky dip. 🍀

This conversion would have been a rather significant milestone, you see. Even with a slightly alarming 2.5% expense ratio (because, well, crypto), its multi-asset approach would have distinguished it from the single-asset Bitcoin ETFs approved earlier this year. Apparently, variety is the spice of life… unless you’re the SEC.

Cautionary Tale of Regulatory Flip-Flopping

This whole debacle mirrors the SEC’s treatment of Grayscale’s application. Accelerated approval, followed by immediate reversal. It suggests that within the hallowed halls of the SEC, a spirited debate is raging. Or possibly they’re just playing a very elaborate game of regulatory limbo.

Sources (who wish to remain anonymous, likely fearing retribution from the SEC’s Department of Mild Annoyance) say the SEC is pondering how to treat multi-asset ETFs, particularly those containing tokens that don’t have their own dedicated spot ETFs (like ADA and XRP). They’re supposedly working on a framework to standardize things and reduce the 240-day review period for the 19b-4 form – a process that’s about as exciting as watching paint dry. 😴

Bloomberg ETF analyst James Seyffart, a man who clearly needs a hobby, suspects the SEC is deliberately stalling while they finalize these standards. It’s a bold strategy, Cotton, let’s see if it pays off.

The Future is… Unclear. Shocking, We Know.

Neither Bitwise nor the SEC are offering any concrete timelines. Bitwise hasn’t said if they’ll stick with the 2.5% fee if the ETF *ever* launches, because why would they clarify anything? The proposal remains pending, floating somewhere in the bureaucratic ether.

So, Bitwise and Grayscale are stuck in a regulatory holding pattern, while the SEC attempts to navigate the ever-evolving world of crypto ETF listings. It’s a bit like trying to herd cats… made of digital code. 😼

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2025-07-23 20:16