Key Takeaways
- xBitwise is seeking to convert its multi-crypto index fund, BITW, into an ETF.
- On July 22, the SEC approved the conversion, but then moved to freeze further action pending a review.
- Grayscale faces a similar problem with its application to convert GDLC.
The Securities and Exchange Commission (SEC) has approved its second multi-crypto exchange-traded fund (ETF)—the Bitwise 10 Crypto Index Fund (BITW).
But as it did with the Grayscale Digital Large Cap Fund (GDLC) earlier this month, the Commission put the final green light on hold pending a review.
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The Journey to Multi-Crypto ETFs
BITW and GDLC are two popular crypto index funds. Between them, they have around $2.6 billion in assets under management.
BITW tracks 10 large-cap cryptocurrencies, with Bitcoin and Ether accounting for around 90% of its portfolio assets. Similarly, GDLC contains approximately 80% BTC and ETH, with ADA, SOL, and XRP making up the rest.
Both funds are currently publicly-traded trusts, meaning that shares trade over-the-counter. By converting them to ETFs, Bitwise and Grayscale intend to list shares on NYSE Arca.
Approval Orders Stayed
The SEC approved Grayscale’s application to convert GDLC into an ETF on July 1. But shortly after the proposal was approved, the Office of the Secretary notified the NYSE by letter that the Commission intended to “review the delegated action.”
It offered no explanation for the decision.
On July 22, a similar chain of events occurred for Bitwise, which received a near identical letter following the initial approval of its application.
Grayscale Challenges SEC Delay
Recalling Gensler-era battles over spot Bitcoin ETFs, asset managers are lawyering up to take on the SEC and its opaque approval process.
In a letter to the SEC, Grayscale argued that the GDLC stay order amounted to an extension of the 240-day deadline by which the agency is legally bound to approve or deny applications.
“The consequences of a failure to meet the statutory approval or disapproval deadline, regardless of the reason, are clear,” the letter stated.
“The rule proposal is deemed approved.”
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James Morales is CCN’s blockchain and crypto policy reporter. He has been working in the news media since 2020, writing about topics such as payments, banking and financial technology. These days, he likes to explore the latest blockchain innovations and the evolving landscape of global crypto regulation.
With an educational background in social anthropology and media studies, James uses his platform as a journalist to explore how new technologies work, why they matter and how they might shape our future.
