SEC Delays Decision on Bitwise Crypto Index Fund Conversion

The U.S. Securities and Exchange Commission (SEC) has postponed its decision on the proposed conversion of Bitwise’s crypto index fund into an exchange-traded fund (ETF).

The Bitwise 10 Crypto Index Fund, trading under the ticker BITW, currently includes BTC, ETH, XRP, SOL, ADA, AVAX, LINK, DOT, BCH, and UNI based on market cap weighting, according to its official website.

On November 14, NYSE Arca filed a proposed rule change with the SEC to list and trade shares of the fund, which was published for public comment in the Federal Register on December 3. The SEC was initially expected to make a decision by January 17, but it has extended this timeline by an additional 45 days, pushing the decision to March 3. In a release late Tuesday, the SEC stated, “The Commission finds it appropriate to designate a longer period within which to take action on the proposed rule change so that it has sufficient time to consider the proposed rule change and the issues raised therein.”

Bloomberg ETF analyst James Seyffart commented, “As expected, the SEC has punted/delayed the decision on Bitwise Invest’s filing to convert the Bitwise 10 Crypto Index Fund (BITW) into an ETF. The final deadline is in late July.” He noted that Grayscale’s similar request to convert its mixed-crypto fund into an ETF would also likely face delays, with the next deadline set for February 2.

In November, the SEC also postponed its decision regarding approvals for options on spot Ethereum ETFs from Bitwise and Grayscale. Conversely, in December, it approved the first spot Bitcoin and Ethereum combo ETFs from Hashdex and Franklin Templeton after an initial delay. Additionally, Bitwise filed for an XRP ETF in October.

Osprey Funds Plans ETF Conversion for OBTC

On Tuesday, Osprey Funds announced its intention to file a registration statement with the SEC to convert its Osprey Bitcoin Trust (ticker OBTC) into an ETF “as soon as practicable.”

Notably, Osprey Funds had previously entered into an agreement with Bitwise Asset Management for the acquisition of all the OBTC fund’s assets under the ticker BITB in August of last year. However, in a press release issued concurrently on Tuesday, Osprey Funds announced the termination of the asset purchase and contribution agreement, citing the lack of necessary regulatory approvals by December 31. The firm stated, “Osprey intends to subsequently provide its investors with an update as to its strategic alternatives for OBTC.”