The US Securities and Exchange Commission (SEC) has reversed course on approving Bitwise’s 10-Crypto Index Fund conversion to an exchange-traded fund (ETF), marking another episode of regulatory whiplash that has left market participants questioning the agency’s decision-making processes.
The SEC initially approved the conversion of Bitwise’s BITW fund through an expedited process on July 22, only to suspend that approval the same day. Deputy Secretary Sherry R. Haywood announced the commission would conduct an indefinite review under Rule 431, effectively halting the fund’s transition to ETF status.
“The Commission will conduct a review of the approval for the ETF conversion of the Bitwise 10-Crypto Index Fund,” Haywood stated, adding that “this action will be postponed until further order is given.”
Multi-Asset Exposure at Stake
The Bitwise fund represents a significant departure from single-asset Bitcoin and Ethereum ETFs currently available to investors. The diversified portfolio includes major cryptocurrencies such as Bitcoin, Ethereum, Solana, XRP, Sui, and Cardano, offering institutional and retail investors broader exposure to the digital asset ecosystem through a regulated vehicle.
The fund’s approval would have marked a milestone in crypto ETF evolution, moving beyond the Bitcoin and Ethereum products that have dominated institutional adoption to date. However, the regulatory reversal has introduced fresh uncertainty into the market just as altcoin interest appears to be gaining momentum.
Pattern of Regulatory Reversals
The Bitwise situation mirrors a previous incident involving Grayscale’s Digital Large Cap ETF, where the SEC similarly issued an approval before subsequently delaying implementation. Nate Geraci, CEO of The ETF Store, highlighted the unusual nature of these reversals.
“Like the Grayscale Digital Large Cap ETF, the approval order was issued and then delayed,” Geraci commented on his X page. “It is truly strange. Both ETFs should be allowed to be listed.”
The pattern suggests internal procedural conflicts within the SEC, with different divisions potentially operating under varying interpretations of crypto ETF policy.
Industry analysts interpret the suspension as part of broader SEC strategy to manage crypto ETF approvals while developing comprehensive regulatory frameworks.
The commission appears to be using procedural mechanisms to buy time for policy refinement, particularly as it evaluates applications for various altcoin ETFs including Solana and Dogecoin products. The reversals may reflect efforts to avoid setting precedents that could pressure the agency to expedite other pending applications.
No decisions on altcoin ETF applications are expected before September-October 2025, according to regulatory timelines, leaving market participants in extended uncertainty about multi-asset crypto products.
Market Implications for Altcoin Season
Despite the regulatory setback, some analysts view the initial approval as validation of growing institutional interest in diversified crypto exposure. Valentin Fournier, an analyst at BRN, emphasized the broader momentum building behind altcoin access.
“Momentum behind broader altcoin access continues to build. Following the recent launch of a Solana ETF, the SEC has now approved Bitwise’s 10 Crypto Index to be converted into an ETF,” Fournier noted. “While execution of the conversion has been delayed, this marks a major step toward multi-asset exposure for both institutional and retail investors.”
Fournier highlighted the timing significance, stating that “this move is well-timed, aligning with ongoing capital rotation away from BTC and into altcoins. Broader ETF availability is likely to accelerate this trend, funneling liquidity toward high-quality digital assets over purely speculative plays — strengthening the foundations of this alt-season.”
