SEC Fast‑Tracks, Then Freezes Bitwise’s Crypto Index ETF Conversion

By José Oramas July 24, 2025 In Bitwise, ETF, SEC

Source:AdobeStock

The SEC’s Division of Trading and Markets granted “accelerated approval” for Bitwise to convert its BITW into a spot ETF, only for the approval to be immediately halted.
This situation is similar to an earlier event this month where Grayscale’s Digital Large Cap Fund also received accelerated ETF approval before being promptly put on hold by the SEC.
Industry analysts suggest the SEC’s quick reversal might indicate internal disagreements or an attempt to buy time while developing a broader crypto ETF framework.

The SEC has once again pulled the brakes on a crypto ETF. This time after approving Bitwise’s conversion request, then pausing it hours later.

On Tuesday, the SEC’s Division of Trading and Markets granted “accelerated approval” for Bitwise to convert its Bitwise 10 Crypto Index Fund (BITW) into a spot ETF. But that approval didn’t last long.

Assistant Secretary Sherry Haywood issued a letter the same day invoking Rule 431 of the SEC’s Rules of Practice, announcing that the Commission would review the delegated decision. The approval was formally stayed and will remain frozen “until the Commission orders otherwise”.

Another ETF Left in Limbo

Bitwise applied for the ETF conversion in November. The fund holds a basket of cryptocurrencies including Bitcoin and Ethereum.

The situation mirrors what happened earlier this month with Grayscale’s Digital Large Cap Fund. That fund, composed mostly of Bitcoin (roughly 80 %) and ETH (around 11 %), was also granted accelerated ETF approval before the SEC quickly issued a stay. Like BITW, it remains in limbo.

Nate Geraci of NovaDius Wealth called it a “bizarre situation”, similar to the SEC’s earlier approval-then-delay of Grayscale’s ETF.

Plot thickens on Grayscale Digital Large Cap ETF…

SEC Division of Trading & Markets issued approval order on July 1st.

*Should* have been the end of it & GDLC would be live.

But that approval order was then stayed.

Grayscale attorneys aren’t having it. Sent letter to SEC. pic.twitter.com/gsQgp0kqyp
— Nate Geraci (@NateGeraci) July 12, 2025

Industry analysts say the about-face may be strategic. Bloomberg’s James Seyffart said the move likely reflects internal disagreement or stall tactics as the SEC works toward a broader ETF framework. Eric Balchunas, also at Bloomberg, suggested the agency might be “buying time” while it works out a framework for crypto ETF listings.

Scott Johnsson of Van Buren Capital speculated that the decision was pushed through under delegated authority to avoid intervention from Commissioner Caroline Crenshaw, a vocal crypto skeptic. He also suggested the pause could be a procedural tool to reset or delay the 240-day timeline attached to ETF applications.

So either (1) they again approved under delegated authority knowing Crenshaw would throw another wrench — perhaps so GDLC wasn’t penalized by the first wrench or (2) this (and GDLC) was planned by the Commission as an end-around the 240-day statutory period. Both explanations are the kind of funny business that shouldn’t really be happening under Atkins.