Emergency halt after approval by the US SEC! Bitwise and Grayscale Crypto Assets Index ETF face suspension again, October may become a critical time point.

The recent actions of the U.S. Securities and Exchange Commission (SEC) have caused confusion in the market. Following Grayscale, Bitwise's Crypto Assets Index Fund (BITW) was also immediately suspended from trading after being approved to convert into an ETF. Analysts interpret that the reasons behind the SEC's suspension order may involve internal reviews and rule-making. The timeline for the listing of the Crypto Assets Index ETF remains uncertain, with October potentially becoming a crucial Node, attracting widespread attention from Crypto Assets investors.

After SEC approval, Bitwise ETF is put on hold

The U.S. Securities and Exchange Commission (SEC) has recently made headlines for its contradictory actions regarding crypto asset index ETF products. On July 22, the agency just expedited the approval of Bitwise's application to convert its multi-crypto asset fund Bitwise 10 Crypto Index Fund (BITW) into an exchange-traded fund (ETF).

The ETF aims to provide cryptocurrency investors with risk exposure to a basket of mainstream crypto assets, including Bitcoin [BTC], Ethereum [ETH], Ripple [XRP], and Solana [SOL], among others. However, the SEC emphasized in its approval statement that the approval was for "accelerated review" and immediately issued a halt order, preventing the formal listing and trading of the ETF.

Decoding SEC's Contradictory Signals: Internal Review or Undefined Rules?

The SEC's recent suspension order is reminiscent of the situation earlier this month when the Grayscale Digital Large Cap Fund was similarly halted from trading after being approved, leaving participants in the crypto assets market feeling perplexed.

Bloomberg ETF analyst James Seyffart interprets this as suggesting that the delay may be due to two main reasons: first, it may stem from the directive of one or more SEC commissioners. He stated: "The conversion of Bitwise has been paused by one or more commissioners. This means they cannot really convert it to an ETF at the moment... at least not right now."

Secondly, the SEC may need more time to finalize the approval framework for cryptocurrency ETFs. In fact, when the conversion of Grayscale's multi-crypto index fund was halted, the latter explanation was widely discussed. Other policy observers, such as Scott Johnsson, also agree with this view. However, Johnsson criticized the SEC's actions, claiming that these suspensions are "ridiculous," especially under the leadership of Chairman Paul Atkins, who is viewed as a supporter of cryptocurrency. "I have to wonder what is happening inside the SEC... Both of these explanations are the kind of ridiculousness that should not occur under Atkins' leadership."

Market confidence undermined, industry awaits clear timetable

Nate Geraci from the ETF Institute also speculates that the delay may come from certain committee members within the SEC. As attorney Adam Gana from Gana Weinstein LLP noted, Geraci also believes that the SEC's practice of "approving first and pausing later" will "create chaos and undermine market confidence."

It is worth noting that not only the cryptocurrency index ETFs are facing obstacles, but also the approval of single altcoin ETFs is experiencing delays. For example, the decision on Fidelity's spot SOL ETF application has been postponed.

Nevertheless, Geraci predicts that the SEC's standard crypto assets ETF approval framework is expected to be ready in the fall. However, Johnson and another Bloomberg ETF analyst, Eric Balchunas, both stated that these delays are unlikely to extend beyond October.

The SEC's continued delays have prompted issuers like 21Shares to explore other faster avenues to seek approval for their crypto assets index ETF. Whether all altcoins and index ETFs can receive the final green light before October remains a focal issue for participants in the crypto assets market, with the ETF listing timeline still uncertain.

Conclusion: The SEC's capriciousness in the approval of cryptocurrency ETFs has undoubtedly doused the hopes of the crypto market expecting mainstream institutional funds to enter. Internal process disputes and unclear regulatory frameworks are the main obstacles at present. Will October, the golden autumn, become the key turning point to break the deadlock and welcome the first truly diversified crypto index ETFs? Global cryptocurrency investors are holding their breath, and the market urgently needs clearer regulatory guidance to boost confidence.