The Securities and Exchange Commission approved — then abruptly paused — Bitwise’s plan to convert its Bitwise 10 Crypto Index Fund (BITW) into a spot exchange-traded fund (ETF) on Tuesday, raising fresh uncertainty around the agency’s standards for crypto ETFs.
The fund holds 90% of its weight in bitcoin (BTC) and ether (ETH), with the remainder spread across Solana (SOL), XRP, Cardano (ADA), Avalanche (AVAX), Chainlink (LINK), Bitcoin Cash (BCH), Uniswap (UNI) and Polkadot (DOT). It manages $1.68 billion in assets and rebalances monthly.
Bitwise launched the fund in 2017. The 2.5% expense ratio remains steep by ETF standards, but the conversion to a spot ETF would make BITW the first multi-asset crypto index ETF in the U.S. — if it proceeds. The asset manager has not yet disclosed if the management fee would stay at 2.5%.
A similar product, Grayscale’s Digital Large Cap Fund (GDLC), which tracks BTC, ETH, XRP, SOL and ADA, also received initial SEC approval before the agency reversed course, pausing the fund’s launch.
A letter from the SEC on Tuesday said “the Commission will review the delegated action,” identical wording to the letter Grayscale received when its ETF was paused.
According to sources who spoke to CoinDesk at the time, the SEC’s hesitation likely stems from the need to establish consistent standards for crypto ETFs, particularly for tokens like XRP and ADA that do not yet have standalone ETFs.
The SEC’s ETF docket has been busy. On Tuesday, the regulator published filings from Franklin Templeton, Fidelity, Invesco Galaxy, and others seeking to amend redemption mechanics for their Bitcoin and/or Ethereum ETFs. It also launched a review of the Canary Capital SUI ETF and extended the deadline on 21Shares’ SUI ETF application.
Separately, 21Shares filed a proposal for an ETF tracking ONDO, the token powering real-world asset platform Ondo Finance.