SEC Approves Then Pauses Bitwise’s Attempt to Convert BITW Crypto Index Fund to ETF
July 22, 2025 — The U.S. Securities and Exchange Commission (SEC) has taken a notable but cautious step in the evolving crypto exchange-traded fund (ETF) landscape. On Tuesday, the regulator approved Bitwise Asset Management’s proposal to convert its Bitwise 10 Crypto Index Fund (BITW) into a spot ETF but immediately placed that decision on hold, reflecting ongoing uncertainty over crypto-related ETF standards.
Background on BITW and the Proposed Conversion
Bitwise launched the BITW fund in 2017 as a crypto index fund that manages approximately $1.68 billion in assets. The fund is heavily concentrated in bitcoin (BTC) and ether (ETH), which together make up over 90% of the portfolio. The remaining assets are allocated across eight significant alternative cryptocurrencies including Solana (SOL), XRP, Cardano (ADA), Avalanche (AVAX), Chainlink (LINK), Bitcoin Cash (BCH), Uniswap (UNI), and Polkadot (DOT). The fund undergoes monthly rebalancing to maintain its targeted allocation.
The proposed conversion to an ETF format would mark the BITW fund as the first multi-asset crypto index ETF in the U.S., a milestone given that most crypto ETFs approved so far are single-asset, primarily focused on bitcoin or ether. Notably, the fund’s current expense ratio stands at 2.5%, which is relatively high compared to traditional ETFs, though Bitwise has not publicly stated whether this fee would change if the conversion proceeds.
SEC’s Pause Follows Similar Moves on Crypto ETFs
The SEC’s approval-then-pause approach mirrors recent behavior with other crypto ETF filings, notably Grayscale’s Digital Large Cap Fund (GDLC). Grayscale’s multi-asset crypto fund, which tracks BTC, ETH, XRP, SOL, and ADA, also received initial approval before being put on hold by the SEC. In both cases, the SEC cited a need to “review the delegated action,” using near-identical language in official communications to each firm.
Industry sources suggest that the SEC’s hesitation is due in part to the complexity of approving ETFs that include tokens like XRP and ADA, which do not yet have standalone ETFs. The agency appears to be cautious about establishing consistent regulatory standards for multi-asset crypto ETFs, especially given the fragmented status of crypto regulatory frameworks and concerns about market manipulation risks.
Broader Regulatory Activity This Week
Tuesday’s developments are part of a larger flurry of crypto ETF-related filings and regulatory reviews. The SEC also announced plans to amend redemption mechanics on bitcoin and ether ETFs managed by major firms including Franklin Templeton, Fidelity, and Invesco Galaxy. Furthermore, it initiated a review of the Canary Capital SUI ETF and extended the evaluation period for 21Shares’ SUI ETF application.
In an additional move, 21Shares filed for a new ETF proposal focused on the ONDO token, the native asset of real-world asset platform Ondo Finance, highlighting ongoing interest in innovation within the crypto ETF space despite regulatory caution.
Market Context
As the SEC reviews these proposals, crypto markets continue to experience mixed activity. At the time of the SEC announcement, bitcoin’s price hovered just below $118,000, down about 0.80%, while ethereum declined nearly 2.9%. Other leading altcoins such as XRP, ADA, and SOL also saw notable price drops, reflecting broader market volatility amid regulatory developments.
Looking Ahead
While Bitwise’s BITW fund awaits the SEC’s final decision, the recent developments underscore the cautious yet evolving regulatory environment surrounding crypto ETFs. Market participants and investors will likely be watching closely for signs of the SEC’s criteria and timeline for approving multi-asset crypto ETFs, which could open up new investment avenues in the U.S. market.
Helene Braun is a New York-based markets reporter covering crypto and Wall Street developments. She specializes in regulatory news around spot bitcoin ETFs and broader digital asset trends.
Disclosure: Portions of this article were assisted by AI tools but verified by editorial staff to ensure accuracy.
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