The U.S. Securities and Exchange Commission (SEC) has unexpectedly paused the conversion process of Bitwise’s 10 Crypto Index Fund into an exchange-traded fund (ETF), prolonging regulatory ambiguity for XRP and altcoin-based ETFs.
This reversal countermands initial approval granted by the SEC’s Division of Trading and Markets, underscoring the regulator’s cautious stance toward cryptocurrency ETFs. The move places spot-based XRP and altcoin ETF approvals in extended regulatory limbo, with clear pathways for authorization now appearing unlikely in the immediate future.
Investors retain access to leveraged and futures-based ETFs for assets like XRP and Solana, though these products involve elevated risk profiles compared to spot ETF structures. The SEC’s handling of Bitwise’s application parallels its treatment of Grayscale’s Digital Large Cap Fund conversion, indicating persistent regulatory inconsistencies.
The decision highlights ongoing challenges within the U.S. cryptocurrency ETF landscape, creating headwinds for market growth and eroding investor confidence in regulatory predictability.