SEC’s Crypto ETF Flip-Flop: XRP ETF Gets Greenlit, Then Frozen 🤯

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So, the US Securities and Exchange Commission (SEC) decided to play a little game of “let’s confuse everyone” on July 22. They gave the go-ahead for NYSE Arca to list the Bitwise 10 Crypto Index ETF, which is like a basket of digital assets including XRP, Solana, Cardano, and a bunch of others, right next to Bitcoin and Ether. But then, almost immediately, they put the whole thing on ice. Classic SEC, am I right? 😂

The official reason? The proposal was “consistent with Section 6(b)(5) of the Exchange Act” because it supposedly prevents fraud, promotes fair trading, and protects investors and the public. Yeah, sure, because nothing says “trust me” like freezing an ETF you just approved. 🙄

Bitwise’s trust, known as BITW, already trades over the counter, but moving it to a national exchange was supposed to be a big deal. The fund’s asset mix, according to the SEC’s order, is mostly Bitcoin (78.72%), with a bit of Ether (11.10%) and XRP (4.97%). The rest is spread across Solana, Cardano, Sui, Chainlink, Avalanche, Litecoin, and Polkadot. But here’s the kicker: the SEC said that at least 85% of the portfolio had to be in assets that back other SEC-approved ETFs, leaving only 15% for the smaller altcoins. Talk about playing it safe! 🛡️

Just when everyone thought the ETF was a done deal, the SEC’s Office of the Secretary stepped in. In a letter from Assistant Secretary Sherry R. Haywood, they announced that the Commission would review the delegated action, effectively putting the whole thing on hold. So, BITW stays OTC-traded, and everyone’s left scratching their heads. 🤔

ETF specialists on X were quick to react. Bloomberg analyst James Seyffart tweeted, “We have approval of the Bitwise 10 Index fund — BITW — but just like Grayscale’s GDLC earlier this month, Bitwise has been stayed by either one or multiple commissioners. Meaning they cannot actually convert it into an ETF … yet.” Fellow analyst Nate Geraci called it a “bizarre situation,” suggesting that both Bitwise and Grayscale “should be allowed to convert/uplist asap.”

This isn’t the first time the SEC has pulled a move like this. Just last month, they did something similar with Grayscale’s Digital Large Cap ETF. It seems the Commission is divided on how quickly to expand US crypto-ETF offerings beyond single-asset products. Since Rule 431 reviews are discretionary and open-ended, we could be waiting anywhere from a few weeks to several months for a final decision. How exciting! 🎉

Now, everyone’s wondering two things: Did the inclusion of XRP, which has been a hot topic in the SEC’s crypto enforcement, influence the decision to review? And, will the SEC use this review to impose new conditions on multi-asset crypto ETFs, like stricter custody, pricing, or surveillance standards? Who knows? Maybe they’re just having fun with us. 🤷‍♂️

While the stay doesn’t affect BITW shareholders right now, Bitwise argues that an NYSE-listed ETF would improve liquidity, eliminate premium-discount issues, and broaden distribution through brokerage platforms that don’t handle OTC products. They also claim that regulated exchange trading would enhance transparency and investor protection. Sounds great, but for now, it’s all on hold. 🚫

So, where does this leave us? The fund’s fate is in the hands of a Commission that’s clearly struggling with how fast to open the US market to diversified crypto exposure. Investors looking for a regulated way to bundle Bitcoin, Ether, XRP, and other large-cap altcoins will have to wait—or stick with OTC trusts that don’t offer the same level of protection. Good luck with that! 🍀

At press time, XRP was trading at $3.349. Keep your wallets close and your eyes on the SEC. This isn’t over yet! 🔍

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2025-07-24 07:14