The U.S. Securities and Exchange Commission has paused the conversion of Bitwise's 10 Crypto Index Fund into an ETF, impacting major assets like BTC and ETH.
The SEC's Decision
The Bitwise 10 Crypto Index Fund was set for ETF conversion approval, involving key crypto assets like BTC, ETH, and XRP. However, the SEC's immediate pause now subjects it to a full Commission review. Bitwise Asset Management, led by CEO Hunter Horsley, has not issued a direct statement. The SEC communicated its decision via a formal letter by Sherry R. Haywood.
The regulatory pause affects Bitwise's strategy and existing institutional investors, preventing new retail inflows. The fund covers diverse assets, with BTC comprising approximately 80% of holdings. Market activities such as on-chain inflows showed no significant disruptions immediately after the news broke.
Historical Context
Historical precedents, including a similar pause for Grayscale's fund, emphasize ongoing scrutiny within the crypto ETF domain. The SEC’s review process follows previous pauses, affecting spot ETF hopefuls and large-cap crypto baskets.
Expert Opinions
James Seyffart, ETF Analyst at Bloomberg, mentioned, "The Bitwise ETF has been ‘stayed by either one or multiple commissioners. Meaning they cannot actually convert it into an ETF...yet.’
Market participants could face protracted uncertainty, pending further regulatory announcements. The event underscores complexities in financial product approvals and potential impacts on crypto market dynamics.
The SEC's decision to pause Bitwise's ETF conversion highlights ongoing regulatory challenges within the crypto industry and leaves market participants waiting for subsequent developments.
