SEC’s Cryptic Flip-Flop: Approves Then Pauses Bitwise ETF in a Whimsical Dance 🕺

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Imagine a world where the US Securities and Exchange Commission (SEC) decides to play a game of hot potato with Bitwise’s crypto index fund. They approved it, and then, quicker than you can say “bitcoin,” they paused it, leaving everyone scratching their heads and wondering if this was just a cosmic joke. 🤷‍♂️

The SEC’s division of trading and markets, with a twinkle in their eye, granted an “accelerated approval” of the Bitwise 10 Crypto Index conversion into an ETF on Tuesday. This meant Bitwise could have asked the SEC to declare the registration effective earlier than the usual timeline, but oh, how things can change in a blink! 🌪️

However, in a letter the same day, SEC assistant secretary Sherry Haywood, perhaps feeling a bit mischievous, said the “order is stayed until the Commission orders otherwise,” and the “Commission will review the delegated action.” It’s like they gave a child a toy and then snatched it away, saying, “Not so fast, little one!” 😂

Bitwise’s cryptocurrency index fund, the Bitwise 10 Crypto Index Fund, which trades under the ticker BITW, is a delightful mix of various cryptocurrencies, including Bitcoin (BTC) and Ether (ETH). The firm, with a hopeful heart, applied to convert it into an ETF back in November. But now, they’re left in a curious state of limbo, much like a character in one of Roald Dahl’s stories, waiting to see what the next page holds. 📖

The SEC and Bitwise, when reached for comment, were as silent as the grave. It’s almost as if they’re playing a grand game of hide-and-seek, and we’re all just spectators trying to guess where the next clue will lead. 🕵️‍♀️

Situation mirrors Grayscale ETF delay

Bloomberg ETF analyst James Seyffart, with a knowing wink, said in an X post on Tuesday that the Bitwise ETF has been “stayed by either one or multiple commissioners. Meaning they cannot actually convert it into an ETF…yet.” It’s like the SEC decided to add an extra layer of mystery to the whole affair, just for fun. 🎭

“This wasn’t due for a decision until next week. So the SEC went pretty early with this decision.”

NovaDius Wealth Management president Nate Geraci called it a “bizarre situation,” and said it’s similar to the Grayscale Digital Large Cap ETF conversion delay, which was approved on July 1 and then paused soon after. “IMO [in my opinion], both of these should be allowed to convert/uplist asap,” Balchunas said, sounding a bit exasperated, as if he’s been waiting for his turn on a never-ending carousel. 🎡

“Funny business” going on at SEC, says exec

Scott Johnsson, general partner at investment management firm Van Buren Capital, said in an X post on Tuesday that the Bitwise ETF was approved “under delegated authority” and speculated this was done as the SEC believed its sole Democrat commissioner, Caroline Crenshaw, would try to disrupt the approval process. Alternatively, Johnsson speculated that the pause might be a plan by the SEC, now chaired by Paul Atkins, to get around the 240-day statutory period for final approval.

“Both explanations are the kind of funny business that shouldn’t really be happening under Atkins.”

Bloomberg ETF analyst Eric Balchunas, always the optimist, said he thinks the SEC might be stalling until the agency comes up with a listing standard for crypto ETFs. “I think they want to put out their generic listing standards first, which is probably coming soon. Get comments. Implement in time [for] October due dates. That’s my theory anyway,” he said, sounding a bit like a detective piecing together a puzzle. 🧩

Other ETF delays as SEC considers simplifying approvals

The SEC, never one to rest on its laurels, also extended its deadline for ruling on in-kind redemptions for Bitwise’s Bitcoin and Ether spot ETFs on July 17. It’s as if they’re playing a grand game of chess, moving pieces around the board to keep us all guessing. 🏺

Reporter Eleanor Terrett said on July 1 that stock exchanges, fund managers, and the SEC are exploring simplifying the ETF approval process for select crypto investment vehicles. The expedited process would automate portions of the current application procedures, allowing certain ETF issuers to circumvent 19b-4 filings. It’s like they’re trying to turn a complex dance into a simple waltz, but only time will tell if they’ll succeed. 🎶

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2025-07-23 08:48