The SEC once again cautioned people about the risks of jumping into crypto investments fueled by FOMO, especially as the approval for Bitcoin exchange-traded funds (ETFs) is looming. Their message, posted on social media, highlighted the dangers tied to digital assets like meme stocks, cryptocurrencies, and NFTs, emphasizing that celebrity endorsements shouldn’t be the sole reason to invest.
This warning had surfaced back in January 2021 during a booming market and was reiterated in March 2022 when things were cooling down. Speculation sparked on social platforms that this warning hinted at an imminent approval of spot Bitcoin ETFs before a deadline on January 10th.
The SEC highlighted how influential figures endorsing crypto might tempt investors, but urged against basing financial decisions solely on these endorsements. They also mentioned instances where celebrities faced fines for promoting specific cryptocurrencies without proper disclosure, like Kim Kardashian settling a charge related to Ethereum Max (EMAX) promotion on Instagram.
The report underscored the volatility of assets influenced by trends and personalities, cautioning investors about potential substantial losses in a short time frame. It asked readers to consider how they would feel facing significant drops in their investments in a single day.
The crypto world is eagerly awaiting the SEC’s decisions on Bitcoin ETFs. Analysts like Eric Balchunas from Bloomberg anticipate approvals for most applicants meeting the regulator’s requirements before December 29th to come through within the week.