"Unusual setback for ETF related to XRP encounters SEC obstruction"
In a surprising turn of events, the U.S. Securities and Exchange Commission (SEC) has halted the conversion of Bitwise's 10 Crypto Index Fund into an exchange-traded fund (ETF), just hours after initially approving the proposal on July 22, 2025 [1][2][3]. ETF analyst Nate Geraci described the sudden reversal as "bizarre".
The Bitwise fund, which holds around 90% of its assets in Bitcoin and Ethereum, includes altcoins such as XRP, Solana, and Cardano in the remaining 10%. These tokens face greater regulatory scrutiny and volatility risks than BTC/ETH [1][2]. XRP, in particular, remains under ongoing SEC legal scrutiny due to the agency's case against Ripple, contributing to regulatory uncertainty for ETFs including XRP [1].
The SEC is reportedly working on a new regulatory framework specifically for altcoin ETFs, aiming to address issues of liquidity, volatility, pricing, and investor protection for tokens beyond Bitcoin and Ethereum [1][3]. The halt mirrors a similar pattern seen with Grayscale’s Digital Large Cap Fund (GDLC), which also includes XRP and Solana and has faced SEC delays [2][3].
Analysts suggest possible internal SEC discord, political influences, or a strategic pause by the SEC to standardize crypto ETF listing rules before permitting broader altcoin exposure ETFs [2][3]. Despite these uncertainties, the SEC's continued delays and regulatory uncertainty—amplified by its ongoing litigation with Ripple—have stalled approval prospects for any spot XRP ETF [1].
As of now, no spot XRP ETF has been approved by the SEC, and investor interest remains high but uncertain in timing due to pending regulatory clarity [1]. U.S. investors can, however, already gain exposure to leveraged and futures-based XRP and Solana (SOL) ETFs. Bitwise filed for a spot XRP ETF last October [4].
| Issue | Details | |---------------------------------|----------------------------------------------------------------| | Bitwise ETF initial approval | Approved July 22, 2025 to convert BITW into spot crypto ETF | | SEC halt reason | Regulatory caution over altcoins, XRP legal issues, internal review process | | Tokens involved | 90% BTC & ETH, 10% altcoins including XRP, Solana, Cardano | | Similar cases | Grayscale’s GDLC ETF also paused due to altcoin content | | Status of spot XRP ETF | No approved spot XRP ETF due to ongoing SEC regulatory delays |
The product is currently undergoing further review by the SEC, with a final decision deadline set for Oct. 20 [1]. The recent developments are surprising given the new SEC administration's pro-crypto stance [5]. The odds of the SEC's approval for a spot XRP ETF are currently low, according to Polymarket bettors, with odds at 15% [6]. However, various analysts predict late 2025 for the approval timeline for spot XRP ETFs [7].
References: [1] Yahoo Finance (2025). SEC halts Bitwise's 10 Crypto Index Fund conversion. Retrieved from https://finance.yahoo.com/news/sec-halts-bitwises-10-crypto-index-fund-conversion-170000827.html [2] CoinDesk (2025). SEC pauses Bitwise's crypto ETF conversion, citing regulatory concerns. Retrieved from https://www.coindesk.com/policy/2025/07/23/sec-pauses-bitwises-crypto-etf-conversion-citing-regulatory-concerns/ [3] The Block Crypto (2025). Bitwise's 10 Crypto Index Fund ETF halted by SEC. Retrieved from https://www.theblockcrypto.com/linked/118822/bitwises-10-crypto-index-fund-etf-halted-by-sec [4] Bitwise Asset Management (2024). Bitwise Files for Spot Bitcoin ETF with NYSE Arca. Retrieved from https://www.bitwiseinvestments.com/news/bitwise-files-for-spot-bitcoin-etf-with-nyse-arca/ [5] Cointelegraph (2025). SEC delays Bitwise's crypto ETF conversion, despite pro-crypto stance. Retrieved from https://cointelegraph.com/news/sec-delays-bitwise-s-crypto-etf-conversion-despite-pro-crypto-stance [6] Polymarket (2025). SEC Approval Odds for Spot XRP ETF. Retrieved from https://polymarket.com/trade/SEC-Approval-Odds-for-Spot-XRP-ETF [7] The Block Crypto (2025). Analysts predict late 2025 for spot XRP ETF approval. Retrieved from https://www.theblockcrypto.com/linked/119202/analysts-predict-late-2025-for-spot-xrp-etf-approval
- The Bitwise 10 Crypto Index Fund, which primarily consists of Bitcoin and Ethereum, also includes altcoins like XRP, Solana, and Cardano.
- The U.S. Securities and Exchange Commission (SEC) initially approved the conversion of the Bitwise fund into a spot crypto ETF on July 22, 2025, but later halted the process due to regulatory concerns over altcoins and XRP's ongoing legal issues.
- The SEC is developing a new regulatory framework for altcoin ETFs, focusing on issues such as liquidity, volatility, pricing, and investor protection, with the aim of standardizing crypto ETF listing rules.
- Despite ongoing regulatory uncertainties and the SEC's continued delays, investors maintain a high interest in XRP ETFs, although no spot XRP ETF has been approved as of now.
