Author: Tom Mitchelhill, Cointelegraph; Compiler: Songxue, Jinse Finance
The U.S. Securities and Exchange Commission (SEC) has reissued a warning about FOMO cryptocurrency investments — just days before a spot Bitcoin exchange-traded fund is expected to receive approval.
In a Jan. 6 X (formerly Twitter) post, the SEC’s Office of Investor Education again warned retail investors about the risks associated with digital assets, including memes, cryptocurrencies and non-fungible tokens (NFTs).
The “Don’t Miss the FOMO” blog post first appeared on January 23, 2021, when the cryptocurrency and stock bull market was in full swing, with Bitcoin, Ethereum, and many other Altcoin hitting all-time highs in November 2021. Around March 2022, when the market cooled, another warning was issued.
Several users on social media speculated that the report may indicate that the SEC will soon approve one or more spot Bitcoin ETFs, currently awaiting a decision before the January 10 deadline.
The warning cited celebrities and athletes promoting crypto assets, urging investors not to make financial decisions simply because celebrities tout investment opportunities.
“You may see your favorite athletes, entertainers or social media influencers promoting such investment opportunities. While it’s tempting, never make an investment decision based solely on their advice.”
Over the years, regulators have levied fines and penalties against celebrities for their role in promoting certain cryptocurrencies.
On October 3 last year, Kim Kardashian was accused of failing to disclose that she was paid $250,000 to promote a fake token called Ethereum Max (EMAX) to her 360 million Instagram followers, and subsequently agreed to The SEC paid a settlement of $1.26 million.
In addition, the report warned investors of the potential volatility that assets that move significantly due to "trends and influencers" could bring, saying that while they may be attractive at first, they may fail as the market moves without them. As the situation continues to develop, losses tend to accumulate quickly.
"How would you feel if you lost 20%, 30%, or even 50% of your investment in one day?" the report asked readers.
The crypto industry is currently waiting with bated breath for the Bitcoin ETF space. Bloomberg ETF senior analyst Eric Balchunas predicts that most applicants will be approved within a week, or at least those who meet regulators' requirements by Dec. 29.
