Crypto ETF Approval: SEC’s Shockwave Halts Bitwise Fund Conversion

Key Points

1. The SEC’s Division of Trading and Markets initially approved Bitwise’s 10 Crypto Index Fund conversion to an ETF, but the approval was quickly suspended by higher authorities.

2. Bitwise’s fund, tracking top cryptocurrencies by market cap (excluding stablecoins), was seen as a pioneering effort in transparent crypto investment products.

3. The SEC has historically delayed or rejected crypto ETF applications, citing concerns over market surveillance and investor protection, though it approved spot Bitcoin ETFs in 2024 after a court ruling.

4. The suspension of Bitwise’s ETF conversion underscores the SEC’s cautious approach, which may delay similar applications and affect broader crypto market optimism.

5. Investors are advised to stay informed about regulatory developments and understand the risks, as the SEC prioritizes thorough reviews before granting full approval for crypto ETFs.