The U.S. Securities and Exchange Commission (SEC) has again cautioned about FOMO crypto investing just days before the expected spot Bitcoin exchange-traded funds (ETF) approval.
SEC Cautions Retail Investors of Inherent Risks in Digital Assets
In a January 6 X (formerly Twitter) post, the Securities and Exchange Commission’s Office of Investor Education again cautioned retail investors of the risks linked to digital assets. These include cryptocurrencies, meme stocks, and nonfungible tokens (NFTs).
One of the initial appearances of the ‘ Say no go to FOMO’ blog post came on January 23, 2021. It came amid a roaring equities and crypto bull market that resulted in Ether, Bitcoin, and several other altcoins reaching new all-time highs by November of that year. The caution came again around March of the following year when markets were cooling.
Numerous social media users hypothesized that the report could indicate that the Securities and Exchange Commission would soon ratify one or several Bitcoin exchange-traded funds, expecting a verdict sometime before a January 10 deadline.
SEC Warns Against Crypto Endorsements by Celebrities
The caution touched on athletes and celebrities promoting crypto assets, encouraging investors not to make financial verdicts just because famous figures praised an investment opportunity. One might see their beloved entertainer, social media influencer, or athlete promoting such investment opportunities.
Despite the temptation, one should not solely use their recommendations to make investment decisions.
For a long time, the SEC has imposed fines and penalties on celebrities for promoting specific cryptocurrencies. On October 3 last year, Kim Kardashian agreed to pay the Securities and Exchange Commission a $1.26B settlement. This is after being accused of failing to reveal that she received $250000 to promote Ethereum Max (EMAX), a fake token, to her numerous Instagram followers.
Further, the report cautioned investors about the possible unpredictability linked to assets that swing deeply because of ‘influencers and trends.’ It noted that despite being alluring at first, losses mostly pile up rapidly as the market moves on without them.
Crypto Community Keen Interest in Spot Bitcoin ETFs
The reporters asked the readers how they would feel if their investment lost a specific percentage in a day. The crypto sector is presently monitoring the Bitcoin exchange-traded fund space anxiously.
Eric Balchunas, an ETF analyst with Bloomberg, envisages most applicants’ approval will happen this week. Additionally, those who met the SEC’s requirements before December 29 will be ratified within the week.
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