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Bitcoin prices fell 5% after regulators delayed approval of the first U.S. exchange-traded funds to invest directly in cryptocurrencies, dampening investors’ hopes for quick access to the world’s largest capital market.

The U.S. Securities and Exchange Commission said in a series of filings late Thursday that it needed more time to consider seven bitcoin ETF applications, including one from BlackRock, the world’s largest asset manager.

The drop in bitcoin’s price means the token has recouped most of its gains after a Washington court ruled this week that the agency rejected asset manager Grayscale’s ability to turn its flagship vehicle, the Grayscale Bitcoin Trust, into an ETF.

The court ruling puts pressure on the SEC to drop its decade-long policy of rejecting ETFs based directly on controversial tokens. Cryptocurrency advocates have long called for the creation of a spot bitcoin ETF, arguing that it would give consumers a cheap and secure way to trade bitcoin instead of buying it directly from unregulated cryptocurrency exchanges.

Demand for spot bitcoin ETFs has grown this year, with more traditional players trying to enter the space. Fidelity, WisdomTree, Invesco Galaxy, VanEck, Bitwise and Valkyrie Digital Assets also delayed applications for spot bitcoin ETFs on Thursday.

But the regulator argues that it has failed to reassure investors that the bitcoin market is not vulnerable to manipulation. Gary Gensler, chairman of the U.S. Securities and Exchange Commission (SEC), called the cryptocurrency market “rife with scams and rife with peddlers” in July. Even so, the SEC has approved a bitcoin futures ETF that tracks futures prices tied to the cryptocurrency.

A Washington court has forced the SEC to review its handling of bitcoin ETFs. It has 45 days to decide whether to comply with the court decision, request a court review or appeal directly. The SEC said it was “reviewing the court’s decision to determine next steps.” Regulators are expected to make a decision on the spot bitcoin ETF in mid-October.

“We believe that based on specific concerns about the spot bitcoin market, it is very likely that the SEC will present alternative arguments to justify continuing to reject the spot bitcoin ETF application,” said Berenberg Capital Markets analyst Mark Palmer.

He noted that Coinbase’s involvement in ETF filings further complicates matters. Coinbase has proposed an oversight sharing agreement with regulated exchanges hosting potential ETF listings, CBOE Global Markets and Nasdaq. Earlier this year, regulators sued Coinbase for alleged violations of U.S. securities laws.

Palmer added: “We wouldn’t be surprised if the possibility of (Coinbase’s) participation in these ETFs was part of the reconfiguration argument for the SEC’s rejection of the application.”

However, lawyers said the new round of rejections, citing new concerns, would challenge the SEC, which has long opposed the products on the grounds of market manipulation.

“Theoretically, they could try to oppose these filings on other grounds, but for years they put all their eggs in one basket because there was not an adequately regulated market for trading cryptocurrencies, and the court rejected the SEC’s argument outright,” Jeremy Senderowicz of Vedder Price LLP.

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