TLDR
- SEC pauses Bitwise ETF after approval, raising fresh crypto fund concerns.
- Bitcoin, Ethereum dominate Bitwise ETF; SEC halts move over token mix.
- XRP, Cardano add complexity to Bitwise ETF, triggering SEC review halt.
- Bitwise ETF faces SEC pause as crypto index scrutiny intensifies.
- Crypto ETF from Bitwise on hold despite initial SEC approval nod.
The U.S. Securities and Exchange Commission approved the Bitwise ETF conversion but unexpectedly paused it on the same day. The Bitwise ETF, which planned to offer diversified crypto exposure, now faces a review despite initial regulatory clearance. This move raises new questions about the SEC’s evolving stance on crypto-linked investment products.
Bitcoin (BTC) and Ethereum (ETH) Dominate the Bitwise ETF Portfolio
The Bitwise ETF holds nearly 90% of its weight in Bitcoin and Ethereum, reflecting the market dominance of these two assets. Bitcoin remains the largest holding in the portfolio, while Ethereum accounts for a significant portion of the remaining allocation. These two assets provide the core structure of the Bitwise ETF, supporting its broad exposure claim.
ETF Update: @BitwiseInvest 10 Crypto Index ETF has been approved by the #SEC but is in a “stayed” status like the @Grayscale Digital Large Cap ETF.
IMO: They are staying these until Clarity Act is passed?
Remember these ETFs hold baskets of digital assets many of which have no… https://t.co/5jW02ApWCM pic.twitter.com/fM6QlAkhpS
— MartyParty (@martypartymusic) July 22, 2025
The fund initially operated as a private trust, limiting access to select participants before its proposed conversion into a regulated ETF. The SEC’s approval granted on July 22 indicated a shift toward broader crypto acceptance in traditional markets. However, the agency quickly halted the approval, pending further internal review by the Commission.
XRP, Solana and Cardano Face Regulatory Uncertainty
XRP, Solana and Cardano form part of the remaining 10% allocation in the Bitwise ETF, adding diversity to the fund. Each token brings additional utility and blockchain innovation but has faced inconsistent treatment by regulatory agencies. Their inclusion in the fund may contribute to the SEC’s hesitation.
The absence of standalone ETFs for XRP and Cardano may also play a role in the SEC’s pause. These assets, though popular, operate in a gray area regarding regulatory clarity, unlike Bitcoin or Ethereum. Consequently, their representation in the Bitwise ETF invites deeper scrutiny from regulatory authorities.
This sudden pause mirrors a similar situation involving Grayscale’s Digital Large Cap Fund earlier this month. Grayscale’s product, which includes XRP and ADA, also received initial approval before the SEC suspended it. The consistent language in both pause orders suggests a coordinated internal reassessment of crypto index funds.
Chainlink, Avalanche and Polkadot Add Depth to the Bitwise ETF
The Bitwise ETF also features Chainlink, Avalanche, and Polkadot, each representing smaller portions of the fund. These tokens offer advanced blockchain infrastructure capabilities, increasing the fund’s technological diversification. Yet, their lower market caps compared to BTC and ETH present valuation volatility concerns.
Each of these assets lacks a direct ETF listing, further complicating their role in a broader index-based offering. While they add depth to the Bitwise ETF, they also introduce complexity in regulatory review. This complexity may delay final approval as the Commission reevaluates inclusion standards.
Bitwise maintains its standing as one of the first firms to attempt a multi-asset spot ETF. The fund’s 2.5% expense ratio remains unchanged, and no update on future fee adjustments has been announced. Meanwhile, Bitwise has not publicly responded to the recent SEC reversal.
Regulatory Review and Future Implications for the Bitwise ETF
The SEC paused the Bitwise ETF under Rule 431, triggering a stay and internal review of the delegated approval. This review halts any forward movement on trading or listing the Bitwise ETF until the Commission issues a new directive. The SEC has not set a date for its final decision.
Recent filings from other asset managers, including Fidelity and Franklin Templeton, show continued interest in crypto ETFs. The SEC’s docket includes proposals for SOL, DOGE, and SUI-focused products, indicating a busy regulatory landscape. However, uncertainty remains, especially for funds holding assets without dedicated ETF structures.
