The SEC won't approve BTC ETFs because it can't control BTC. Bitcoin price variability does still seem to be susceptible to manipulation by organizations who control a large portion of the mining machines, or people who have very large stockpiles of bitcoins.
looking by your logic ,It can be the exact case when it comes to allowing foreign investments in a country,one country could rip another by pumping more money into their stock exchange and rip everyone off and move away with a huge amount of money when they make a successful trade, so what precautions can the government take in that case and cannot be taken when it comes to bitcoin.