SEC delays decision on Bitwise's proposed crypto index fund conversion to an ETF

The U.S. Securities and Exchange Commission has postponed deciding on the proposed conversion of Bitwise’s crypto index fund into an exchange-traded fund.

The Bitwise 10 Crypto Index Fund, which trades under the ticker “BITW,” currently consists of exposure to BTC, ETH, XRP, SOL, ADA, AVAX, LINK, DOT, BCH and UNI on a market cap-weighted basis, according to its website.

NYSE Arca filed a proposed rule change with the SEC to list and trade shares of the fund on Nov. 14, published for comment in the Federal Register on Dec. 3. The SEC’s initial decision was due on Jan. 17, but the agency has now extended this by a further 45 days to March 3. “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,” the SEC wrote in a release late Tuesday.

“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,” Bloomberg ETF analyst James Seyffart said . “Final deadline is in late July.” Seyffart added that Grayscale’s similar request to convert its mixed-crypto fund into an ETF would also likely be delayed by the SEC at its next deadline on Feb. 2.

In November, the SEC also delayed its decision on whether to approve options on spot Ethereum ETFs from Bitwise and Grayscale. However, it approved the first spot Bitcoin and Ethereum combo ETFs from Hashdex and Franklin Templeton in December after an initial delay. Bitwise also filed for an XRP ETF in October.

Osprey Funds intends to convert OBTC into an ETF after Bitwise deal terminated

Also on Tuesday, Osprey Funds announced its intent 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 entered into an agreement with Bitwise Asset Management for its spot Bitcoin ETF (ticker “BITB”) to acquire all of the OBTC fund's assets in August last year. 

However, in another press release issued at the same time on Tuesday, Osprey Funds announced the termination of the asset purchase and contribution agreement as the parties did not receive all regulatory approvals by Dec. 31. “Osprey intends to subsequently provide its investors with an update as to its strategic alternatives for OBTC,” the firm said.