The US Securities and Exchange Commission (SEC) has delayed its decision on the Bitwise 10 Crypto Index Fund (ETF) proposal, setting a new deadline of March 3, 2025. This extension provides the regulator more time to conduct a comprehensive review before deciding whether to approve or deny the application.
Why the SEC Extended the Review Period
The SEC’s decision to extend the review period aligns with its careful and methodical approach to cryptocurrency-related financial products. The new deadline, March 3, 2025, allows the Commission additional time to assess the potential market impact, regulatory implications, and investor protection aspects of the proposed fund.
The Bitwise 10 Crypto Index Fund is designed to track the performance of the ten largest cryptocurrencies by market capitalization. These include Bitcoin (BTC), Ethereum (ETH), Solana (SOL), XRP, Cardano (ADA), Avalanche (AVAX), Chainlink (LINK), Bitcoin Cash (BCH), Polkadot (DOT), and Uniswap (UNI). Bitwise has managed this index fund since 2018.
NYSE Arca submitted the proposal to list and trade shares of the Bitwise ETF on November 14, 2024. The filing was published for public comment in the Federal Register on December 3, 2024. Under standard procedures, the SEC is required to act within 45 days of publication, which would have been January 17, 2025. However, the Commission has now officially postponed that deadline.
Broader Implications for Crypto ETFs
The approval of a spot crypto ETF tracking a basket of major cryptocurrencies would represent a significant milestone. It would provide traditional investors with a regulated and convenient way to gain diversified exposure to the digital asset market. The SEC’s cautious stance reflects its ongoing efforts to balance innovation with investor safety.
This delay was widely anticipated by market analysts. Bloomberg Intelligence ETF analyst James Seyffart noted on social media that the postponement was expected. He also suggested that a proposal from Grayscale for its GDLC fund, with a deadline of February 2, will likely face a similar delay.
Simultaneously, some industry observers believe that the regulatory environment for crypto ETFs could shift following the upcoming presidential inauguration. Several analysts have expressed optimism that approvals for pending applications may accelerate under a new administration.
Beyond this application, Bitwise has also filed with the SEC to launch a "Bitcoin Standard Corporations ETF." This proposed fund would invest in companies that hold significant Bitcoin on their corporate balance sheets, offering a different avenue for Bitcoin-focused investment.
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Frequently Asked Questions
What is the Bitwise 10 Crypto Index Fund?
It is a proposed exchange-traded fund designed to track the performance of the top ten cryptocurrencies by market capitalization. It offers a way to gain diversified exposure to the major digital assets through a single investment vehicle.
Why did the SEC delay its decision?
The SEC often extends review periods for complex and novel financial products to ensure a thorough analysis. This allows them to properly evaluate all potential risks, market impacts, and regulatory considerations before making a final decision.
What is the new deadline for the SEC's decision?
The SEC has set a new deadline of March 3, 2025. By this date, it must either approve the application, deny it, or initiate further proceedings to consider the proposal in more depth.
How does this ETF differ from a Bitcoin-only ETF?
While a Bitcoin ETF tracks only the price of Bitcoin, this fund aims to track an index of the ten largest cryptocurrencies. This provides built-in diversification across multiple major digital assets instead of exposure to a single one.
Could the political climate affect the approval of crypto ETFs?
Some analysts believe a change in administration could influence the regulatory approach and pace of approvals for cryptocurrency investment products. However, the SEC's decisions are ultimately based on a framework of laws and its mandate to protect investors.
What other similar ETFs is Bitwise proposing?
Bitwise has also filed for a "Bitcoin Standard Corporations ETF." This fund would not hold cryptocurrencies directly but would invest in companies that hold substantial Bitcoin as part of their treasury reserves.