The U.S. Securities and Exchange Commission (SEC) has approved the conversion of the Bitwise Crypto Index Fund into a full-fledged exchange-traded fund (ETF), marking a significant step for diversified crypto investments. But just as markets began to react, the ETF’s launch was suddenly delayed due to a regulatory stay, leaving investors frustrated and analysts questioning the move.
An Altcoin-Friendly ETF—But on Hold
The ETF, managed by Bitwise, is designed to track a basket of leading cryptocurrencies. According to documents filed with the SEC, its current allocations include Bitcoin (78.72%), Ethereum (11.10%), and XRP (4.97%). It also holds smaller portions of altcoins like Solana, Cardano, Chainlink, SUI, Avalanche, Polkadot, and Litecoin.
Under SEC guidelines, at least 85% of ETF assets must be in cryptocurrencies already approved for exchange-traded products, mainly BTC and ETH. The remaining 15% can include other assets like XRP and SOL, which are not individually approved but included as part of the fund’s diversified approach.
Bitwise plans to rebalance the ETF monthly, allowing investors to buy shares through mechanisms similar to those used in traditional stock ETFs.
Why Did the SEC Pause the Bitwise XRP ETF Launch After Approval?
Despite the official approval, the ETF has not gone live. The SEC has imposed a regulatory stay under Rule 431(e), essentially putting the launch on pause. This unexpected move has triggered criticism across the industry.
Nate Geraci, president of The ETF Store, called the delay “bizarre” and argued that both Bitwise and other similar products like Grayscale’s Digital Large Cap Fund should be allowed to proceed.
“This delay contradicts the very approval granted,” Geraci said on X. “Investor access to diversified crypto exposure is being unfairly held back.”
Altcoins Are Already on the Move
While the ETF is stuck in limbo, altcoins are already seeing renewed interest. Over the past 30 days, Bitcoin’s dominance in the market has fallen from 65% to 60%, signaling a shift in sentiment. Investors appear to be rotating capital into altcoins, which are posting stronger returns.
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Just in the past week:
- Ethereum jumped 26%
- Dogecoin soared 40%
- XRP gained 22%
- Cardano rose 23%
Crypto analyst Kyle Chassé noted this trend on X, pointing out that altcoins are gaining momentum even without institutional vehicles like ETFs. He added that the Altcoin Season Index has climbed from 35 to 50, indicating a tilt toward altcoins—but not quite a full-blown altseason yet.
Why This ETF Matters Now
The Bitwise ETF could give investors easy exposure to high-potential altcoins like XRP and Solana right when the market is shifting in their favor. With Bitcoin consolidating just under $120,000, many traders are now looking for alternative growth opportunities, especially in Layer-1 tokens.
Currently, the fund is only available over-the-counter. If the SEC lifts its stay, Bitwise can list the ETF on a national exchange, making it more accessible to retail and institutional investors alike. Until then, the fund remains in a strange spot: approved, but not active.
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FAQs
Yes, the U.S. Securities and Exchange Commission has approved Bitwise’s Crypto Index Fund to convert into an ETF, which includes XRP, Ethereum, and several other altcoins. However, the fund is not yet live due to a regulatory stay.
The ETF’s launch has been paused due to a regulatory stay imposed under SEC Rule 431(e). Although approved, the fund cannot begin trading until this stay is lifted, which has caused frustration among analysts and investors.
The ETF includes a mix of major and emerging assets:
Bitcoin (78.72%)
Ethereum (11.10%)
XRP (4.97%)
Plus exposure to Solana, Cardano, Chainlink, SUI, Avalanche, Polkadot, and Litecoin.
