SEC’s Bitwise ETF Tango: Approval, Pause, Market in Perplexity 🌀

by
  • The SEC’s approval of Bitwise ETF and its immediate halt caused the crypto market to perform a bureaucratic waltz.
  • Regulatory limbo continues as spot crypto ETFs spin in existential dread. 🤷♂️

In a grand performance of bureaucratic absurdity, the Securities and Exchange Commission (SEC) granted the Bitwise 10 Crypto Index Fund the green light to become an exchange-traded fund (ETF), only to yank it back hours later like a magician’s rabbit. This Kafkaesque routine left Wall Street and the crypto industry twirling in confusion, their portfolios gasping for clarity.

The approval, bestowed on July 22 via an official agency order (publicly documented, of course), restructured BITW—a fund dishing out exposure to ten digital currencies (Bitcoin, Ethereum, XRP, Solana, Polkadot, etc.)—into a spot ETF. Bitwise, now the proud owner of the title “first diversified spot crypto ETF in the U.S.,” aimed to unlock investor access and reset the bar for regulatory sanity. But sanity, as we know, is a fickle companion in the SEC’s hall of mirrors.

This flagship product, managing $1.7 billion with monthly asset rebalancing, was a portfolio of BTC, ETH, XRP, and a few altcoins—like a crypto five-course meal with no cutlery. The SEC’s approval was as fleeting as a Bitcoin bull run in 2017, vanishing into a bureaucratic fog hours later.

Approval to Limbo in a Regulatory Waltz

Source – sec.gov

In a masterclass of legal prestidigitation, the SEC cited Rule 431 to halt the approval, leaving Assistant Secretary Sherry R. Haywood to declare the order “pending further review.” This move mirrored previous stunts with Grayscale’s multi-asset crypto fund—a regulatory jujitsu of approval and suspension. One legal observer quipped, “This is the type of funny business that ought not to be going on,” while the market channeled its inner Dostoevsky, awaiting enlightenment.

The SEC’s cryptic decree—“This order shall not take effect until further notice”—granted itself infinite freedom to determine if delegated approvals align with its ever-shifting crypto ETF standards. A regulatory Russian nesting doll, perhaps?

SEC’s Framework: A Cosmic Joke for Crypto Applicants

The SEC’s sudden pivot froze the market in a holding pattern, stalling other ETF proposals (Bitcoin redemption mechanisms, Ethereum tracking, Solana shenanigans) like a traffic jam on a one-way street. Regulators, it seems, are fixated on crafting “generic listing criteria” before unleashing products that track baskets of altcoins or new tokens—a bureaucratic equivalent of teaching a goldfish to solve calculus.

Recent agency dockets hint at streamlined processes for certain ETF categories, with automated filings potentially exempt from the 19b-4 review (a 240-day regulatory marathon). Meanwhile, Bitwise and Grayscale dangle in limbo, their investors performing a Pavlovian dance of hope and despair. The SEC, ever the enigmatic puppeteer, continues to spin its cosmic joke: “Clarity will be provided… eventually.”

Read More

2025-07-23 21:09