After briefly poking above $28,000 earlier this week, the price of Bitcoin (BTC) is down more than 4% once again over the past 24 hours.

The price drop occurred after the U.S. Securities and Exchange Commission announced it was postponing its decision on multiple spot Bitcoin exchange-traded funds (ETFs).

Investors had been looking forward to Friday’s SEC announcement of its decision about spot Bitcoin ETFs. However, late Thursday night, the SEC announced instead that it was postponing its decision until October.

Cryptocurrency had been soaring throughout the week after Tuesday’s news that a U.S. court of appeals had ordered the SEC to reevaluate its decision to reject Grayscale’s attempt to convert the Grayscale Bitcoin Trust (GBTC) into an ETF.

Bitcoin soared as much as 8% on that ruling. But by the end of the week, Bitcoin had returned most of its gains, especially with a rapid price decline Friday morning. Bitcoin is currently trading around $26,000.

Other cryptocurrencies also have suffered in the wake of the SEC’s decision. Ethereum (ETH) is down 4%, while leading altcoins Binance Coin (BNB), XRP (XRP) and Solana (SOL) are down 4%, 3% and 2% respectively.

Why Is Bitcoin Down Today?

Bitcoin dropped in price after the SEC announced late Thursday night that it was delaying its decision on spot Bitcoin ETFs for multiple applicants, including BlackRock, Wisdom Tree, VanEck, Bitwise and Valkyrie Digital Assets.

A spot ETF differs from a futures ETF—the only kind of ETF currently approved by the SEC for the trading of cryptocurrencies—in that a spot ETF tracks the current price of the underlying asset, while a futures ETF tracks potential future prices of the underlying asset.

Futures ETFs deal in the trading of futures, which are complex derivatives products best suited for direct trading only by experienced investors.

In June, investment giant BlackRock filed for its spot Bitcoin ETF, and the cryptocurrency markets reacted with great excitement. On the news, the price of BTC even breached the $30,000 level in July as it rode a wave of positive announcements regarding Bitcoin ETFs.

Excited by an investment giant the size of BlackRock making a foray into cryptocurrency—BlackRock held a total of $9.43 trillion in assets under management as of July 2023—many other companies reignited or filed their own applications with the SEC for spot Bitcoin ETFs. Among those were Bitwise, Valkyrie, VanEck and even Fidelity.

However, by mid-July, cryptocurrency prices stagnated as investors’ positive sentiment wore off. In the first weeks of August, investors had had enough of crypto’s stagnation and liquidated large amounts of futures positions, causing precipitous declines across the board in cryptocurrency prices.

Earlier this week, though, it looked like crypto might quickly recover when a federal appeals court judge ordered the SEC to review its denial of Grayscale’s ETF, but Thursday’s decision by the SEC brought that rally to an abrupt halt.

Is Cryptocurrency a Safe Investment?

Cryptocurrency markets have seen a resurgence this year. This resurgence has come on the heels of 2022’s crypto winter, which was exemplified by the rapid collapse of crypto exchange FTX in November 2022.

As a result of FTX’s collapse and other cirumstances, U.S. regulators cracked down on exchanges and other companies trading in and creating cryptocurrencies.

The SEC chair, Gary Gensler, has claimed in the past that his agency believes most cryptocurrencies are in fact securities and hence fall under the purview of a plethora of already-existing legal precedents.

This claim has been further asserted in recent filings by the SEC against a handful of crypto exchanges and companies—including Binance and Coinbase—alleging that those entities were dealing in the unlicensed sale and transfer of securities.

However, Gensler and the SEC have also stated that Bitcoin itself is probably a commodity—not a security—and hence should be regulated by the CFTC, not the SEC.

Even after its recent price declines, Bitcoin is still up nearly 60% year-to-date. Still, BTC’s current price around $26,000 is almost 60% below its all-time high of $64,400, set in November 2021.