Cryptocurrencies had a tough day this Wednesday.

Every single digital coin among the 100 largest names, ranked by total market caps, were trading in the red at 5 p.m. EDT. Sorting through the best-known crypto names, bitcoin and Ethereum were down by a bit more than 8% in 24 hours, and Ripple had lost 15% of its market value. Ethereum Classic lost all of this Monday's big gains and then some, falling 13% as of this writing. The strongest performance in the top 100 was the Tether coin, which was designed to follow the value of the U.S. dollar as closely as possible.

The cryptocurrency market is now worth a total of $219.3 billion, according to Coinmarketcap. That's 13% below the market's total value 24 hours ago. Digital currencies are prone to wild swings, but this one was an amazingly coordinated downturn of epic proportions even for this corner of the financial world.

So let me tell you what happened today.

Two cartoonish businessmen running away from several incoming meteors, each showing the emblem of a popular cryptocurrency while crashing down in flames.

Image source: Getty Images.

This cryptocurrency ETF will have to wait

The Securities and Exchange Commission had been looking into an application to launch the market's first exchange-traded fund with an exclusive focus on holding cryptocurrency tokens, filed on June 20 by the Cboe (NYSEMKT:CBOE) BZX exchange. The proposed ETF, which would be known as SolidX Bitcoin Shares, would require a change to the SEC's market-listing rules. That rule change has been under the SEC's microscope since July 2, gathering more than 1,300 public comments along the way.

Today's broad cryptocurrency plunge was triggered by the SEC's extending of its rule-change deadline from 45 days to three months. The final ruling had been expected in a couple of weeks but will now be delayed all the way into the end of September.

The SEC could very well reach a decision sooner than that, but onlookers aren't holding their breath while waiting for that to happen. Therefore, a long-awaited move that could lend legitimacy and stability to the unquiet crypto-market will have to wait for nearly two more months. Patience is a virtue in short supply on this side of the tracks, so every coin took a big step backward on the news.

Is this rule change really going anywhere?

This is not the first attempt to get a cryptocurrency ETF onto the regular stock market, and the delayed decision may in fact be a step on the way to a rejection. Two weeks ago, the Winklevoss twins saw their application to start a bitcoin-specific ETF rejected by the same commission -- for the second time. The SEC is clearly not in a hurry to open the floodgates to cryptocurrency trading on the tried-and-true stock and ETF exchanges.

The regulators are worried about market manipulation, fraud, and weak investor protections. One commissioner dissented from July's Winklevoss rejection, arguing that the necessary rule change actually works under the available legal laws and guidelines. In fact, commissioner Hester Peirce was "concerned that the commission's approach undermines investor protection by precluding greater institutionalization of the bitcoin market."

In other words, there's an undercurrent of support for trading of cryptocurrency instruments within the SEC today, which may lead to different decisions in the future.

But today, the cryptocurrency community is nursing another wound to its dream of joining the more legitimate markets.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.