Don’t hold your breath for a U.S. exchange-traded fund that invests in Bitcoin.

Prospects for such a fund took a nosedive on Wednesday when the U.S. Securities and Exchange Commission (SEC) rejected requests to list nine cryptocurrency funds, citing continuing concerns about manipulation and market surveillance.

While a blow to the hundreds of virtual-currency fans who’ve lobbied for an ETF, the ruling is hardly surprising. The SEC has repeatedly urged exchanges and wannabe issuers to address the risks that ordinary investors face from the manipulation of an unregulated market. That was a key concern in January – when the agency outlined five questions it wanted answered – and why it again denied a Bitcoin fund run by Cameron and Tyler Winklevoss last month.

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“The markets are small and the volumes on some of these exchanges are low, which makes it such that manipulation is possible,” said Chris Matta, co-founder of Crescent Crypto Asset Management. “That’s their major concern and, without having any sort of regulatory body stepping in and policing people doing that, it’s always a possibility.” A Bitcoin ETF will not start trading this year, he said.

The stakes are high for the SEC’s trading and markets division. Stories are still emerging of retail investors – such as one Democratic lawmaker – who bought Bitcoin at the peak of its meteoric surge to around US$20,000 last year, only to see it crash to around US$6,000. On the other hand, at least one commissioner favours approving a fund; Hester Peirce was outvoted on the Winklevoss’s proposal.

The agency noted that “its disapproval does not rest on an evaluation of whether Bitcoin, or blockchain technology more generally, has utility or value as an innovation or an investment” – a statement it also made when denying the Winklevoss’s ETF and a sop, perhaps, to both Mr. Peirce and those who want a fund.

SEC spokesman Ryan White said the agency declined to comment beyond what was posted in Wednesday’s orders.

The nine ETFs denied this time around came from three sponsors: ProShare Capital Management, GraniteShares Advisors and Direxion Asset Management. All of these funds sought to use futures contracts to get exposure, with several planning to short Bitcoin. The regulator had a hard-deadline to deny or approve all of these products over the next month; their requests to list had been pending since December and January.

Investors’ hopes for a Bitcoin ETF now rest on just one fund from VanEck Associates Corp. and SolidX Partners Inc. The regulator this month pushed back a ruling on that product until at least September and could ultimately take through February to make up its mind.

The SEC’s strong position on market integrity shows the ETF issuers have a lot to prove. But, either way, it won’t be the product for the masses that investors (or issuers) really want. The VanEck fund plans to have a high minimum share price, explicitly to discourage retail use.