SEC Stays Bitwise Crypto ETF Launch Despite Approval

3 1 minute read

The Securities and Exchange Commission has placed a stay on the Bitwise 10 Crypto Index Fund’s conversion to an exchange-traded fund, despite approving the fund earlier this week. This decision has created uncertainty around when the diversified crypto ETF will be available in U.S. markets, echoing the actions taken against Grayscale Investment Trust’s Digital Large Cap Fund.

The Bitwise fund, which tracks the Bitwise 10 Large Cap Crypto Index, has a significant holding in Bitcoin at 78.7%, followed by Ethereum at 11.1%. With $1.4 billion in assets across 10 crypto holdings and a 2.5% expense ratio, the fund has been eagerly anticipated by investors.

Although the SEC granted accelerated approval for the fund to convert into an ETF trading on NYSE Arca, Assistant Secretary Sherry Haywood has notified the exchange that the Commission will review the delegated action. This has triggered a stay under Rule 431 of the Commission’s Rules of Practice, delaying the fund’s launch until further notice.

The fund, which currently trades over-the-counter under the ticker BITW, has been operating as a trust since November 2017. Public quotation began in December 2020 through the OTCQX market.

In addition to Bitcoin and Ethereum, the fund holds smaller positions in XRP, Solana, Cardano, SUI, Chainlink, Avalanche, Litecoin, and Polkadot. The approval order requires the fund to maintain at least 85% of its holdings in commodities underlying Commission-approved exchange-traded products, with no more than 15% in other assets.

The stay issued by the SEC prevents trading until further action is taken by the agency. The Office of the Secretary will inform the exchange of any developments regarding the fund’s status.

This delay is reminiscent of the situation with Grayscale’s Digital Large Cap Fund, which also received approval but was immediately stayed earlier this month. With assets under management totaling $774.8 million, this fund tracks the CoinDesk 5 Index.

For more information on this developing story, you can visit the original article at ETF.com. Stay tuned for updates on the Bitwise 10 Crypto Index Fund’s journey to becoming an exchange-traded fund.