SEC Overturns Approval for Bitwise's Multi-Cryptocurrency ETF unexpectedly
In a recent announcement, Deputy Secretary Sherry R. Haywood revealed that the U.S. Securities and Exchange Commission (SEC) has decided to review the approval process for the conversion of the Bitwise 10 Crypto Index Fund into an exchange-traded fund (ETF). This decision comes after the initial approval on July 22, which was subsequently suspended the same day, citing an indefinite review under Rule 431.
The approval of the Bitwise fund, a diversified portfolio that includes major cryptocurrencies such as Bitcoin, Ethereum, Solana, XRP, Sui, and Cardano, was viewed as a validation of growing institutional interest in diversified crypto exposure. The situation mirrors a previous incident involving Grayscale's Digital Large Cap ETF, where the SEC similarly issued an approval before subsequently delaying implementation.
Valentin Fournier, an analyst at BRN, emphasised the timing significance, stating that this move aligns with ongoing capital rotation away from Bitcoin and into altcoins. He further highlighted the broader momentum building behind altcoin access. Nate Geraci, CEO of The ETF Store, highlighted the unusual nature of these regulatory reversals.
Industry analysts interpret the suspension as part of a broader SEC strategy to manage crypto ETF approvals while developing comprehensive regulatory frameworks. The commission is using procedural mechanisms to buy time for policy refinement, particularly as it evaluates applications for various altcoin ETFs including Solana and Dogecoin products. No decisions on altcoin ETF applications are expected before September-October 2025, according to regulatory timelines.
The temporary suspension has introduced fresh uncertainty into the market. However, some analysts believe that the recent approval and subsequent delay of the Bitwise 10 Crypto Index Fund conversion marks a major step toward multi-asset exposure for both institutional and retail investors. Broader ETF availability is likely to accelerate the trend of capital rotation, funneling liquidity toward high-quality digital assets over purely speculative plays - strengthening the foundations of this alt-season.
The initial approval of the Bitwise fund was viewed as a milestone in crypto ETF evolution, moving beyond Bitcoin and Ethereum products. The regulatory reversal, while causing temporary setbacks, could pave the way for more thorough and comprehensive regulations in the future, ensuring a more stable and secure environment for the growth of the crypto market.
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