The Securities and Exchange Commission on Friday rejected a proposed rule change that would’ve allowed for the creation of the first bitcoin exchange-traded fund—a decision that has followers of the world’s largest cryptocurrency wondering what happens next.

In its ruling, the SEC said it was unnerved by the lack of regulation in a market that is largely based outside of the U.S., and was worried about the potential for market manipulation.

Fortunately for investors who were hoping to buy into the fund, Friday’s decision won’t necessarily preclude the approval of other proposed bitcoin ETFs. Two other companies are vying to become the first bitcoin-focused ETF, but what might happen next is unclear.

The New York Stock Exchange filed a proposed rule change with the SEC on Jan. 25 to allow the Grayscale Bitcoin Trust to trade on its ETF exchange, NYSE Arca. The agency now has until Friday, Sept. 22 to issue its ruling. Barry Silbert, the chief executive officer of the Digital Currency Group, Grayscale’s parent company, declined to comment on the Winklevoss decision.

NYSE Arca filed another rule-change proposal to list shares of the SolidX Bitcoin Trust, another product vying to be the first bitcoin ETF, back in July, but it is unclear what is happening and representatives for SolidX couldn't be reached for comment.

One factor that differentiated the Winklevoss proposal from its rivals was the mechanism for tracking the bitcoin price. The Winklevosses planned to use pricing data gleaned from Gemini, a digital-currency exchange launched in late 2015 that commands less than 1% of the bitcoin market.

Both the Grayscale and SolidX proposals would peg the price to the TradeBlock bitcoin index.

Grayscale’s proposal is widely viewed as the favorite within the bitcoin community, largely because shares of its trust GBTC, -1.07% already trade over-the-counter, often at a premium to bitcoin’s net-asset value.

But some have expressed concerns about potential conflicts of interest at Grayscale. In a comment letter filed with the SEC, Jeffrey Wilcke, a representative of the Ethereum Foundation, pointed out the relationship between the Grayscale trust and CoinDesk, an online news service that covers the digital-currency market. Both Grayscale and CoinDesk are owned by DCG. Wilcke couldn't be reached for comment.

Jerry Brito, chief executive director of Coin Center, a bitcoin advocacy group, said the SEC’s concerns about regulation create a “chicken and egg problem.”

“How do we develop well-capitalized and regulated markets in the U.S. and Europe if financial innovators aren’t allowed to bring products to market that grow domestic demand for digital currencies like bitcoin?,” he said in an emailed statement.

When asked about what’s next for bitcoin, Chris Burniske, blockchain analyst and products lead at ARK Invest, said it is “clear that the SEC still has a way to go in terms of getting comfortable with the bitcoin markets.”

Bitcoin market experts said the Winklevoss’s could modify their proposal to address some of the agency’s concerns, but that they would need to start the process again from the beginning, and that BATS would need to issue a new proposed rule change, which the agency would then have a maximum of 240 days to consider.

For their part, the Winklevoss brothers say they remain committed to bringing “COIN” to market.

“We began this journey almost four years ago, and are determined to see it through. We agree with the SEC that regulation and oversight are important to the health of any marketplace and the safety of all investors,” said Tyler Winklevoss in an emailed statement.

Bitcoin BTCUSD, +0.31% sold off sharply after the decision, with the price of a single coin losing $250 in a matter of minutes. But it quickly bounced back, and was trading down 6.3% on the day at $1,116 late Friday in New York, according to the CoinDesk bitcoin price index.

Spencer Bogart, the head of research at Blockchain Capital, said this is evidence that the ETF presented “no change to bitcoin’s compelling fundamental growth story.”

“The drivers of bitcoin demand remain as strong now as they were two months ago before the ETF fervor arrived,” he said.