24.07.2025 00:00
The U.S. Securities and Exchange Commission (SEC) initially approved Bitwise Asset Management's application to convert its flagship crypto index fund, BITW, into an exchange-traded fund (ETF), only to swiftly reverse its decision hours later. This unexpected about-face mirrors a similar situation involving Grayscale's multi-asset crypto ETF application earlier this month, leaving market participants bewildered and raising questions about regulatory clarity within the cryptocurrency space.
Bitwise's BITW, launched in 2017, provides diversified exposure to the cryptocurrency market, primarily holding Bitcoin and Ethereum (approximately 90% of its $1.68 billion in assets). The remaining allocation is distributed across a basket of altcoins, including Solana, XRP, Cardano, Chainlink, Avalanche, Bitcoin Cash, Uniswap, and Polkadot. With a monthly rebalancing schedule and a 2.5% expense ratio, its successful conversion to an ETF would have marked a significant achievement for the U.S. cryptocurrency investment landscape, becoming the first multi-asset spot crypto ETF.
This sudden reversal by the SEC, citing a “review of the delegated action,” is strikingly reminiscent of the Grayscale situation. Both instances demonstrate a pattern of seemingly arbitrary decision-making by the SEC concerning crypto-based investment vehicles, leaving industry observers questioning whether political pressure or a lack of standardized guidelines for crypto ETF listings are behind these inconsistent actions.
Analysts are speculating about the underlying reasons for the SEC's abrupt U-turn, suggesting political motivations or a lack of established criteria for evaluating crypto ETF applications could be at play. The ambiguity surrounding the SEC's actions highlights the continuing uncertainty and challenges faced by the cryptocurrency industry in navigating the regulatory landscape. The SEC’s inconsistent approach underscores the need for clear and consistent regulatory frameworks for digital asset investments, fostering greater investor confidence and market stability.
