SEC reissues crypto ‘FOMO’ warning amid hopes for spot Bitcoin ETFs
The United States Securities and Exchange Commission (SEC) has reissued a warning about FOMO crypto investing — jusdays ahead of the anticipated approval of spot Bitcoin ( BTC ) exchange-traded funds.
In a Jan. 6 post to X (formerly Twitter), the SEC’s Office of Investor Education again warned retail investors of the risks associated with digital assets, including meme stocks, cryptocurrencies, and nonfungible tokens (NFTs).
One of the first appearances of the “Say no go to FOMO” blog post came on Jan. 23, 2021, amid a roaring crypto and equities bull market that saw Bitcoin, Ether ( ETH ), and many other altcoins reach new all-time highs by November 2021. The warning was reu around March 2022.
#SECInvestingResolution 5: Say “NO GO to FOMO” (fear of missing out). Just because others might buy a particular investment, doesn’t mean it’s the right opportunity for you. Learn more about finding out what’s right for you and your investing goals: https://t.co/fixDWoNFrF pic.twitter.com/SGf1z6xmhL
— SEC Investor Ed (@SEC_Investor_Ed) January 6, 2024
Several users across social media theorized the report could suggest the SEC is soon to approve one or more spot Bitcoin ETFs , which is currently awaiting a decision sometime before a Jan. 10 deadline.
The warning mentioned celebrities and athletes promoting crypto assets, urging investors not to make financial decisions simply because popular figures were touting an investment opportunity.
“You may see your favorite athlete, entertainer or social media influencer promoting these kinds of investment opportunities. Although it’s tempting, never decide to invest based solely on their recommendation.”
Over the years, the regulator has slapped celebrities with fines and penalties for their role in promoting certain cryptocurrencies.
On Oct. 3 last year, Kim Kardashian agreed to pay a $1.26 million settlement to the SEC after being charged with failing to disclose that she was paid $250,000 to promote a sham token called Ethereum Max (EMAX) to her 360 million Instagram followers.
Related: BlackRock to slash 3% of workforce ahead of Bitcoin ETF deadline: Report
Additionally, the report warned investors of the potential volatility associated with assets that swing heavily due to “trends and influencers,” saying that while they can be appealing at first, losses often stack up quickly as the market moves on without them.
“How would you feel if your investment lost 20, 30, or even 50 percent in a single day?” the report asked its readers.
The crypto industry is currently watching the Bitcoin ETF space with bated breath. Senior Bloomberg ETF analyst Eric Balchunas predicts that most applicants will be approved within the week, or at least those who met the regulator’s requirements before Dec. 29 .
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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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