The United States Securities and Exchange Commission (SEC) has issued another warning about the dangers of FOMO (Fear of Missing Out) crypto investing just days before the anticipated approval of spot Bitcoin exchange-traded funds (ETFs).
In a post on Jan. 6 on X (formerly Twitter), the SEC’s Office of Investor Education once again emphasized the risks associated with digital assets, encompassing meme stocks, cryptocurrencies, and nonfungible tokens (NFTs).
The initial “Say no go to FOMO” blog post made its debut on Jan. 23, 2021, during a robust crypto and equities bull market, which witnessed Bitcoin, Ether (ETH), and numerous altcoins achieving new all-time highs by November 2021. The SEC reissued this warning around March 2022 as market enthusiasm cooled down.
Speculation has arisen on social media that this report might signal the imminent approval of one or more spot Bitcoin ETFs, currently pending a decision expected before a Jan. 10 deadline.
The advisory cautioned against making financial decisions solely based on endorsements from celebrities and athletes who promote crypto assets. Over time, the SEC has taken action against celebrities, imposing fines and penalties for their involvement in promoting specific cryptocurrencies.
For instance, on Oct. 3, 2023, Kim Kardashian agreed to pay a $1.26 million settlement to the SEC after facing charges related to her failure to disclose a $250,000 payment for promoting a questionable token called Ethereum Max (EMAX) to her 360 million Instagram followers.
Additionally, the report highlighted the potential volatility associated with assets influenced by “trends and influencers,” noting that while they may initially appear attractive, investors can incur significant losses as the market evolves without them.
The cryptocurrency industry is closely monitoring the Bitcoin ETF space, with expectations running high. Senior Bloomberg ETF analyst Eric Balchunas predicts that most applicants, particularly those meeting the regulator’s requirements before Dec. 29, will likely be approved within the coming week.
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