The SEC Has Reiterated Its Cautionary Stance on Crypto Due to Concerns of ETF 'FOMO'

Social media users have highlighted that the regulator's No Go to FOMO advisory coincides with the mounting expectations surrounding spot Bitcoin ETF approvals.

Source: blockchain.news

The United States Securities and Exchange Commission (SEC) recently reiterated its concerns about the risks associated with FOMO-driven crypto investments, just days before the potential authorization of spot Bitcoin exchange-traded funds. On January 6, through a post on X (previously known as Twitter), the SEC's Office of Investor Education once again cautioned retail investors about the volatility and hazards linked to digital assets, including meme stocks, cryptocurrencies, and NFTs.

The Say No Go to FOMO blog post made its debut on January 23, 2021, during a period of robust growth in both the crypto and stock markets, with assets like Bitcoin and Ether soaring to unprecedented peaks by November 2021. This advisory resurfaced in March 2022, sparking speculations on social platforms that the SEC might be gearing up to greenlight one or more spot Bitcoin ETFs, decisions on which are anticipated before January 10.

The post cautioned against the influence of celebrities and athletes endorsing crypto investments, emphasizing that investors should not be swayed solely by the endorsements of popular figures. The SEC has a history of imposing fines on celebrities involved in promoting specific cryptocurrencies. For instance, on October 3 of the previous year, Kim Kardashian reached a $1.26 million settlement with the SEC over allegations of promoting Ethereum Max (EMAX) without disclosing a $250,000 payment. The advisory also underscored the risks tied to assets highly influenced by trends and influencers, noting that while such assets may initially seem attractive, investors often face significant losses as market dynamics evolve.

The report posed a rhetorical question to readers: “Imagine witnessing your investment plummet by 20, 30, or even 50 percent in a single day. How will you feel? “ The crypto community is eagerly awaiting developments in the Bitcoin ETF arena. Eric Balchunas, a senior ETF analyst at Bloomberg, anticipates that most qualifying applicants will secure approval within a week, especially those that met the SEC's criteria by December 29.

Disclaimer: FameEX makes no representations on the accuracy or suitability of any official statements made by the exchange regarding the data in this area or any related financial advice.