SEC Approves Bitwise Crypto Index Fund ETF Conversion

TLDR

• Bitwise ETF conversion approval stayed for further review.
• Fund manages approximately $1.68 billion in assets.
• BTC and ETH comprise about 90% of fund holdings.

The U.S. Securities and Exchange Commission (SEC) approved the conversion of the Bitwise 10 Crypto Index Fund (BITW) into an Exchange-Traded Fund (ETF) on July 22, 2025. The approval, however, was promptly stayed for further review. This decision affects the landscape of cryptocurrency investment vehicles, as the fund aims to provide broad exposure to the crypto market.

With Bitcoin (BTC) and Ethereum (ETH) making up about 90% of its holdings, the fund also includes allocations to XRP, Solana (SOL), Cardano (ADA), and other major altcoins. The move to convert to an ETF aims to attract more institutional investment by offering a regulated product. However, the pause in approval delays the anticipated influx of institutional capital.

Key Players and Current Status of the Approval

Bitwise Investment Advisers is the sponsor of the fund and submitted the ETF application. The SEC Division of Trading & Markets initially approved the conversion, but the order was stayed by Assistant Secretary Sherry R. Haywood for further review. During this period, the Commission will examine the delegated action in accordance with its rules.

Coinbase acts as the custodian for BITW, ensuring the safekeeping of the digital assets. No official public statements have been made by Bitwise executives since the announcement of the stay, and the company has not provided any new comments as of July 23, 2025.

Assets and Institutional Impact

As of now, the fund manages approximately $1.68 billion in assets under management (AUM). With the ETF approval on hold, the anticipated increase in institutional activity is delayed. The affected assets primarily include BTC, ETH, XRP, SOL, ADA, and Polkadot (DOT).

No immediate changes in total value locked (TVL), liquidity, or staking patterns have been reported. However, with BTC and ETH comprising the majority of the fund’s holdings, any market movements related to the ETF decision will largely affect these tokens.

Regulatory Context and Market Reactions

The SEC’s pause on Bitwise’s ETF is reminiscent of similar actions concerning Grayscale’s multi-asset fund ETF conversion. The SEC’s caution is primarily attributed to concerns about market manipulation risks, investor protection, and ETF redemption models.

While the regulatory indecision has caused some concern among social media users and over-the-counter (OTC) investors, major market moves depend heavily on the eventual outcome of the Commission’s review. Past regulatory holds on multi-asset crypto ETFs have led to temporary uncertainty but have not always resulted in significant asset price changes.

For more details, the official SEC filing can be referenced through the Exchange Rule Filing – NYSE ARCA 2024-98. This document provides comprehensive information on the current status and regulatory considerations concerning the Bitwise ETF conversion.