SEC approves, then instantly pauses Bitwise’s ETF conversion

Bitwise ETF Conversion

The US Securities and Exchange Commission made a surprising move by approving and promptly halting the conversion of Bitwise’s crypto index fund into an exchange-traded fund. The decision has left the fund in a state of uncertainty while it awaits further review.

Accelerated Approval

The SEC’s division of trading and markets gave an “accelerated approval” for the Bitwise 10 Crypto Index conversion into an ETF on Tuesday. This approval allowed Bitwise to potentially fast-track the registration process. However, in a letter issued on the same day, SEC assistant secretary Sherry Haywood announced that the order was stayed pending further review by the Commission.

Speculations and Reactions

The cryptocurrency community was abuzz with speculation and reactions to the SEC’s decision. Bloomberg ETF analyst James Seyffart noted that the Bitwise ETF had been “stayed,” meaning it could not yet convert into an ETF. Some experts, including NovaDius Wealth Management president Nate Geraci, deemed the situation as bizarre and called for a swift resolution.

The SEC’s Next Steps

Experts and analysts weighed in on the SEC’s motives behind the approval and subsequent pause of Bitwise’s ETF conversion. Speculation ranged from political maneuvers to potential delays aimed at establishing listing standards for crypto ETFs. The SEC’s extension of the deadline for ruling on in-kind redemptions for Bitwise’s Bitcoin and Ether spot ETFs added further complexity to the situation. This latest development underscores the regulatory uncertainty surrounding crypto ETFs and leaves many questions unanswered about the SEC’s stance on digital asset investment vehicles.