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The U.S. Securities and Exchange Commission (SEC) has created a stir in the crypto world by approving, then immediately halting, a highly anticipated crypto exchange-traded fund (ETF). The ETF, developed by Bitwise, was set to include top cryptocurrencies like Bitcoin (BTC), Ethereum (ETH), and Ripple’s XRP. While the SEC’s Division of Trading and Markets initially granted accelerated approval for the ETF to be listed on NYSE Arca, the decision was later stayed by the SEC’s Office of the Secretary. This sudden reversal has left investors and market analysts puzzled, with some calling the situation “bizarre.”
On July 22, 2025, the SEC’s Division of Trading and Markets gave the green light to a rule change that would allow NYSE Arca to list and trade shares of the Bitwise 10 Crypto Index ETF. This fund is designed to track the performance of the Bitwise 10 Large Cap Crypto Index, which is composed of the largest and most established cryptocurrencies. The index weights its holdings based on free-float market capitalization, providing investors with exposure to a broad selection of leading digital assets.
According to Bitwise, the fund’s composition as of June 30 included 78.72% Bitcoin, 11.10% Ethereum, and 4.97% XRP. Other coins in the mix were Solana (3.03%), Cardano (0.78%), Sui (0.35%), Chainlink (0.32%), Avalanche (0.28%), Litecoin (0.24%), and Polkadot (0.19%). Importantly, the ETF’s structure ensures that at least 85% of its assets are in cryptocurrencies already approved by the SEC for exchange-traded products, while up to 15% can be allocated to other digital assets.
Operationally, the ETF would be supported by well-established financial institutions. Coinbase Custody Trust is slated to handle the custody of the crypto assets, while The Bank of New York Mellon will be responsible for managing cash and administrative operations. Pricing and the net asset value (NAV) of the ETF would be calculated daily using data from CF Benchmarks, which aggregates information from major cryptocurrency trading platforms.
However, the optimism surrounding this milestone was short-lived. Later that same day, the SEC’s Office of the Secretary issued a stay on the approval decision, citing Rule 431 of the Commission’s Rules of Practice. The stay means that the decision will undergo a full review by the entire Commission before it can be finalized. Until then, the ETF cannot proceed to market.
This sudden reversal has drawn criticism and confusion from experts in both traditional finance and crypto sectors. Many are wondering why the SEC would approve the product only to pause it just hours later. The situation is being compared to a similar event involving Grayscale’s Digital Large Cap Fund, which also received approval under NYSE Arca Rule 8.500-E, only to have the decision stayed the same day.
Analysts suggest this may point to deeper regulatory uncertainty within the SEC. It’s possible that internal disagreements or last-minute legal concerns triggered the reversal. The presence of XRP in the ETF may have also played a role, given the token’s controversial history with the SEC. While Ripple recently scored a partial legal victory in its ongoing case with the SEC, XRP remains a regulatory gray area, and its inclusion in a federally approved ETF could have broader implications.
Market reaction to the reveal has been mixed. Some investors had hoped the ETF would open the door to greater institutional adoption and add legitimacy to a broader range of cryptocurrencies beyond just Bitcoin and Ethereum. Others worry that the SEC’s indecisiveness is a sign that crypto regulation in the U.S. remains unpredictable, potentially discouraging innovation and investment.
Bitwise has not yet issued a public statement addressing the stay, but market participants are watching closely. If the Commission eventually upholds the approval, it could mark a major breakthrough in crypto ETF development, especially for funds holding more than just Bitcoin and Ethereum. However, if the stay leads to a reversal of the decision, it could reinforce concerns that U.S. regulators are not ready to embrace the full spectrum of digital assets.
In the meantime, the crypto industry remains in limbo, waiting for clarity from the SEC. As ETFs become an increasingly important gateway for mainstream crypto exposure, the outcome of this situation could set an important precedent for how multi-asset crypto products are regulated in the future.
