Quick Takeaways:
- After receiving SEC approval, Bitwise’s ETF was abruptly halted.
- Experts think internal politics or missing crypto rules are behind it
- This déjà vu moment echoes what happened to Grayscale’s ETF
Bitwise’s ETF Approval Was a Win… Until It Wasn’t
For a few hours on Tuesday, it looked like Bitwise had scored a major victory.
The SEC gave a thumbs-up for the company to convert its Bitwise 10 Crypto Index Fund into a full-blown ETF a move that would’ve made crypto investing much more accessible for everyday investors.
But just as quickly as that win arrived, it was taken away.
Later that same day, a letter from SEC Assistant Secretary Sherry Haywood put the brakes on everything.
The decision was put on hold while the Commission reviews the initial approval. And just like that, Bitwise’s ETF was stuck in limbo.
Bitwise’s ETF Isn’t the Only One in a Holding Pattern
If the entirety of this scenario seems familiar, it is.
Earlier this month, Grayscale faced a nearly identical scenario: approval for an ETF conversion, followed by a quick pause.
“The SEC jumped the gun by making a decision days earlier than expected, only to stall it,” said James Seyffart, an analyst at Bloomberg.
Novadius Wealth Management President Nate Garacy did not withdraw.
He called the situation “bizarre” and echoed what many are feeling: This back-and-forth is exhausting.
And he’s not alone. ETF expert Eric Balchunas added that both Grayscale and Bitwise should be moving forward by now.
According to him, something doesn’t add up.
So What’s Really Going On With Bitwise’s ETF?
Some people think it’s politics.
Scott Johnsson of Van Buren Capital believes the approval was quietly pushed through before Democratic Commissioner Caroline Crenshaw who’s more cautious about crypto could intervene.
Others think the pause was strategic. By putting things on hold, the SEC might be buying time to work out bigger plans, like new rules for how crypto ETFs should work.
And if that’s the case, it might not be all bad. It could mean the SEC is finally working toward a clearer framework something this space desperately needs.
Perhaps all the SEC wants is for the rules to be correct.
Another possibility? The SEC could be holding off because it wants to release uniform listing standards for crypto ETFs.
Eric Balchunas believes the agency is waiting to roll out these new rules and once that happens, everything could move more smoothly.
That would also explain why they’re holding back now. No one wants to approve a bunch of ETFs under outdated or incomplete guidelines.
Meanwhile, reporter Eleanor Terrett says the SEC is already talking with stock exchanges and fund managers about ways to automate parts of the process.
That means easier, faster approvals for some crypto products in the near future.
So yes, it’s frustrating but it could also be a sign of progress.
Bitwise’s ETF Isn’t the Only One on Pause
This is not only ETF conversion that is stuck. The SEC delayed a decision last week for bitwaiz bitcoin and ether spot ETFs on the in-redemption.
That’s yet another delay added to a growing list of crypto-related proposals that are waiting on the SEC’s green light.
What This Means for Crypto Investors
The stop-and-go situation around Bitwise’s ETF highlights something many in crypto already know: regulation hasn’t caught up with innovation.
Right now, ETF issuers are stuck navigating a system that’s unclear, unpredictable, and slow.
But if the SEC does introduce broader standards soon, this weird period could lead to real clarity and momentum.