XRP News: SEC’s Crucial Halt on Bitwise Crypto ETF Sparks Market Turmoil

The world of cryptocurrency is no stranger to volatility, but recent actions by the U.S. Securities and Exchange Commission (SEC) have introduced a new layer of complexity, leaving investors and market participants reeling. In a move that has been widely described as ‘bizarre’ and ‘inconsistent,’ the **SEC** initially approved and then abruptly halted the launch of Bitwise’s 10 Crypto Index ETF, a multi-asset fund that prominently features **XRP** alongside other major digital currencies. This regulatory whiplash sent ripples across the market, causing **XRP**’s price to drop significantly. Let’s dive into the details of this unprecedented situation and what it means for the future of crypto investments.

The SEC’s Unprecedented Reversal: A Regulatory Paradox

On July 22, 2025, the crypto community watched with cautious optimism as the SEC’s Division of Trading and Markets granted accelerated approval for NYSE Arca to list shares of the Bitwise 10 Crypto Index ETF. This seemed like a significant step forward, signaling a growing acceptance of diversified crypto investment products within traditional finance. However, the optimism was short-lived. On the very same day, the SEC’s Office of the Secretary issued a stay, effectively suspending the decision pending a full Commission review. This immediate reversal has created a profound sense of **regulatory uncertainty** and confusion, prompting experts to question the agency’s seemingly contradictory approach to digital asset funds.

What Happened with the Bitwise Crypto ETF?

The **Bitwise** 10 Crypto Index ETF was designed to offer investors diversified exposure to the large-cap cryptocurrency market. Here’s a quick look at its structure and intended holdings:

• Purpose: To track the Bitwise 10 Large Cap Crypto Index.
• Portfolio Composition (as of June 30, 2025):
  • Bitcoin (BTC): 78.72%
  • Ethereum (ETH): 11.10%
  • XRP: 4.97%
  • Smaller allocations to Solana, Cardano, and other assets.
• Compliance: At least 85% of holdings must comply with SEC-approved assets for exchange-traded products.
• Custody & Administration: Coinbase Custody Trust handles custodial services, while The Bank of New York Mellon oversees administrative operations.
• Valuation: Net asset value calculated daily using CF Benchmarks Ltd. pricing, aggregated from major trading platforms.

This comprehensive structure aimed to meet regulatory standards, making the sudden halt even more perplexing for market participants. It represented a carefully constructed pathway for institutional investment, now shrouded in doubt.

Why the Halt? Understanding the Crypto ETF Landscape

This isn’t an isolated incident. The SEC had a similar ‘approve-then-halt’ scenario with Grayscale’s Digital Large Cap ETF on July 1, 2025. This pattern suggests a deeper, unresolved issue within the commission regarding the framework for crypto-based exchange-traded products. Why this consistent hesitation?

• Standardized Criteria: Bloomberg ETF analyst Eric Balchunas suggests the SEC might be delaying approvals to establish more standardized and robust criteria for all crypto ETFs. This implies a desire for a consistent regulatory framework rather than piecemeal approvals.
• Asset Classification Debate: A core challenge remains the classification of digital assets. Is **XRP** a security? What about other cryptocurrencies? The SEC’s ongoing legal battle with Ripple Labs over XRP’s status underscores this fundamental debate, which directly impacts how these assets can be packaged into investment products.
• Procedural Ambiguity: Critics like Nate Geraci of Novadius Wealth Management argue that these applications, once staff-approved, should be allowed to convert to ETFs immediately, rather than facing last-minute stays that create market instability and erode confidence.

The SEC finds itself in a challenging position, balancing its mandate to protect investors with the need to foster innovation in emerging markets. This tension is palpable in their recent actions.

The Immediate Impact on XRP and the Broader Market

The market’s reaction to the Bitwise ETF halt was swift and predictable. **XRP**’s price, already sensitive to regulatory news due to its ongoing legal battle with the SEC, dropped a significant 8.9% within 24 hours of the decision. This sharp decline reflects investor concern over prolonged regulatory delays and the lingering **regulatory uncertainty** surrounding its status.

While Bitcoin and Ethereum also saw minor fluctuations, XRP’s drop was particularly pronounced, highlighting its vulnerability to adverse regulatory developments. The broader crypto market, despite showing resilience with developments like stablecoin regulations (GENIUS Act) and a 45% increase in Bitcoin millionaires since January 2025, remains susceptible to these high-level regulatory interventions. The halting of conversions at the staff level risks deterring institutional capital inflows and slowing down innovation in the space.

Navigating Regulatory Uncertainty: What’s Next for Digital Assets?

The current situation underscores a critical juncture for crypto’s integration into traditional finance. While the initial staff-level approvals for both Bitwise and Grayscale ETFs indicate a willingness to engage with crypto products, the subsequent stays reveal deep-seated concerns within the full Commission. The outcome of these specific cases will undoubtedly set a significant precedent for future **crypto ETF** applications, including those for futures-based XRP ETFs, which remain stalled pending formal rules.

For investors, the key takeaway is continued caution and the need for a clear understanding of the regulatory landscape. Diversified exposure through well-structured products like the Bitwise ETF could be beneficial, but only if regulatory hurdles are definitively resolved. The market eagerly awaits the SEC’s final decision, as their actions are poised to shape the next phase of cryptocurrency adoption and integration into mainstream financial systems.

Sources:

• [1] Decrypt
• [2] TradersUnion
• [3] Economic Times
• [4] InvestingNews
• [5] X (ThePulseWallet)
• [6] Finbold

Frequently Asked Questions (FAQs)

1. What is the Bitwise 10 Crypto Index ETF?

The Bitwise 10 Crypto Index ETF is a proposed multi-asset exchange-traded fund designed to track the Bitwise 10 Large Cap Crypto Index. It aims to provide diversified exposure to major cryptocurrencies like Bitcoin, Ethereum, and XRP, weighted by free-float market capitalization, for institutional and retail investors.

2. Why did the SEC approve and then halt the Bitwise Crypto ETF?

The SEC’s Division of Trading and Markets initially granted accelerated approval, but the Office of the Secretary issued a stay on the same day, suspending the decision for a full Commission review. This action reflects ongoing debates within the SEC about establishing standardized criteria for crypto ETFs and unresolved questions regarding the classification of digital assets, such as XRP, as securities.

3. How did this news specifically impact XRP’s price?

Following the news of the Bitwise ETF’s halt, XRP’s price dropped by 8.9% within 24 hours. This significant decline is attributed to increased investor concern over prolonged regulatory delays and the persistent **regulatory uncertainty** surrounding XRP’s legal status, especially given Ripple Labs’ ongoing lawsuit with the SEC.

4. What does this ‘approve-then-halt’ pattern mean for future crypto ETF approvals?

This pattern, seen with both Bitwise and Grayscale ETFs, suggests that while staff-level approvals might be possible, the full SEC Commission has deeper concerns that could lead to extended delays or even outright rejections. It indicates a need for clearer, standardized regulatory frameworks before broad crypto ETF approvals are granted, potentially prolonging the approval process for other digital asset funds.

5. Is the SEC’s action consistent with its past decisions on digital assets?

The SEC’s actions have been criticized for creating procedural ambiguity and inconsistency. While they are tasked with investor protection and market regulation, the sudden stays after initial approvals have led to questions about their internal consistency and their ability to provide clear guidance for the rapidly evolving crypto market. The ongoing Ripple Labs lawsuit further highlights their struggle with consistent digital asset classification.