Crypto Events

Story: SEC Halts Bitwise and Grayscale Crypto ETFs, Shaking Investor Confidence

By Julie Binoche

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A fresh wave of uncertainty has hit the crypto market after the U.S. Securities and Exchange Commission (SEC) unexpectedly paused the trading of crypto index ETFs from Bitwise…

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On July 22, Bitwise received approval to convert its multi-asset fund—Bitwise 10 Crypto Index Fund (BITW)—into a crypto index ETF.

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This unexpected move mirrored a similar scenario earlier in July when the Grayscale Digital Large Cap Fund was also blocked from going live post-approval.

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James Seyffart, an ETF analyst at Bloomberg, suggested two possible reasons behind the SEC’s reversal.

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“Bitwise has been stayed by either one or multiple commissioners,” Seyffart noted. “Meaning they cannot actually convert it into an ETF…yet.”

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This reasoning aligns with earlier speculation surrounding Grayscale’s halted fund, where regulators were believed to be refining guidelines behind the scenes before allowing…

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Scott Johnsson, a seasoned policy analyst, echoed the concerns but took a firmer stance. He argued that such delays reflect poor internal coordination and run counter to the…

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“I have to wonder what is going on at the SEC,” Johnsson remarked. “Both explanations are the kind of funny business that shouldn’t really be happening under Atkins.”

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Other industry voices have expressed similar frustration. Nate Geraci, president of the ETF Store and founder of the ETF Institute, suggested that the delays were most likely…

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Adam Gana, a legal expert from Gana Weinstein LLP, reinforced this sentiment, stating that such unpredictable decisions erode public trust and damage the SEC’s credibility in…

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“Approval followed by immediate delays does not inspire confidence,” Gana said. “It sends mixed messages to retail and institutional investors alike.”

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Beyond Bitwise and Grayscale, the SEC has also stalled progress on several other ETF proposals.

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Still, some analysts remain optimistic. Geraci believes that a structured approval system for crypto ETFs could be in place by fall.

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However, in the absence of clear timelines, market participants are left guessing.

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The uncertainty has led some companies to explore alternative pathways. Swiss-based 21Shares, known for its crypto-focused ETF offerings, is now reportedly seeking faster routes…

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