The U.S. Securities and Exchange Commission has pushed back its deadline for deciding whether to permit a crucial feature for Bitwise's proposed cryptocurrency investment products.

Regulatory Delay on ETF Structure

In a July 17 filing, the SEC announced an extension to review Bitwise's request for in-kind redemptions on its spot Bitcoin and Ether ETFs proposed for NYSE Arca. The decision window remains within statutory limits of 45-90 days, but the additional time signals regulatory caution about this specific mechanism.

【Notably】in-kind redemptions would allow investors to exchange ETF shares directly for the underlying cryptocurrencies rather than cash - a structure with significant tax implications. This differs from the cash redemption model used by existing Bitcoin ETFs.

Pattern of Regulatory Caution

The delay follows similar SEC actions this month, including a controversial review of Grayscale's Digital Large Cap Fund after initial approval. Legal experts note such last-minute reconsiderations create uncertainty in the emerging crypto ETF market.

——This regulatory hesitation persists despite the SEC's proclaimed shift toward encouraging blockchain innovation under new leadership——

Changing Regulatory Landscape

SEC Chair Paul Atkins has emphasized moving away from the previous administration's "regulation through enforcement" approach. Recent statements highlight tokenization as positive innovation, marking a departure from Gary Gensler's tenure.

【Industry data】shows the SEC has approved 12 crypto-related ETFs in 2025 compared to just 3 in all of 2024, suggesting warming institutional acceptance despite procedural delays.

Market Implications

The redemption method decision could significantly impact: • Investor tax liabilities • Market liquidity dynamics • Institutional participation levels

Analysts suggest the SEC's caution reflects unresolved questions about custody and valuation of in-kind crypto assets rather than fundamental opposition to the products themselves.

As of press time, Bitwise maintains its application represents "the next evolution" in crypto investment vehicles, with a spokesperson noting they "continue constructive dialogue" with regulators.