Bitwise Cryptocurrency Index ETP Delayed by SEC to March

SEC extends Bitwise Cryptocurrency Index ETP filing review period

The U.S. Securities and Exchange Commission has extended its review period of NYSE Arca’s proposal to list shares of the Bitwise 10 Cryptocurrency Index Fund (BITW) as an exchange-traded product, according to a filing on Tuesday.

The decision sets March 3 as a key deadline for regulators to approve or reject the conversion of the $1.4 billion fund, a key test of whether a variety of cryptocurrency investment vehicles can successfully transform into exchange-traded securities.

The proposal, originally submitted on November 14, aims to transform listed BITW from its current over-the-counter status to a fully regulated ETP structure, according to the original document.

Read more: Bitwise seeks to convert $1.3B cryptocurrency index into ETPs

The SEC said it needed more "time to consider the proposed rule changes and the issues raised therein," but did not say in the filing why it needed more time.

The filing states that NYSE Arca is proposing to list BITW under the new Rule 8.800-E category designed for “investment interests based on commodities and/or digital assets.”

According to the fund page, the fund currently holds 10 cryptocurrencies, with Bitcoin accounting for 72.7% of the portfolio, followed by Ethereum (14.7%) and Ripple (XRP 5.8%).

According to Bitwise's initial announcement, if approved, the conversion will move BITW from the current OTCQX best market quote to exchange-traded status, potentially helping to address the fund's premium/discount issues through a creation/redemption mechanism.

OTC trading often presents challenges for investors, who often experience reduced liquidity, a higher likelihood of fraud or stock manipulation than with exchange-listed products.

According to the fund page, the fund currently trades at $60.95 and has an NAV of $71.72, highlighting the pricing gap that the ETP structure is designed to minimize.

The SEC has not received public comments on the proposal during its preliminary review, documents show.

The committee's extended review of the BITW conversion proposal is consistent with its standard 45-day extension period typically used when reviewing new financial products. The March deadline gives regulators more time to evaluate how multi-crypto index products would work within exchange-traded structures.

Bitwise declined to comment on pending regulatory filings.