The United States Securities and Exchange Commission (SEC) has issued a renewed warning to investors regarding the perils of FOMO (Fear of Missing Out) crypto investing.
This caution comes just days before the expected approval of spot Bitcoin exchange-traded funds (ETFs).
In a recent post on X, formerly known as Twitter, the SEC’s Office of Investor Education emphasized the risks associated with digital assets, encompassing meme stocks, cryptocurrencies, and nonfungible tokens (NFTs).
The “Say no go to FOMO” blog post initially surfaced on January 23, 2021, during a bullish period for both the crypto and equities markets, with Bitcoin, Ether, and numerous altcoins reaching record highs by November 2021.
A similar warning was reiterated around March 2022 when market temperatures were cooling.
Social media speculations have arisen, suggesting that this warning might foreshadow the SEC’s impending approval of one or more spot Bitcoin ETFs currently awaiting a decision before the looming January 10 deadline.
The SEC’s advisory cautioned against making investment decisions solely based on endorsements from celebrities and athletes.
It cited the temptation to follow popular figures promoting investment opportunities and the importance of conducting thorough due diligence.
READ MORE: Nonfiction Authors Sue OpenAI and Microsoft for Copyright Infringement in Latest Legal Battle
The regulatory body has previously imposed fines and penalties on celebrities for their involvement in endorsing specific cryptocurrencies.
An example includes Kim Kardashian, who, on October 3, 2023, agreed to pay a $1.26 million settlement to the SEC.
She was charged with failing to disclose a $250,000 payment she received for promoting a dubious token called Ethereum Max (EMAX) to her 360 million Instagram followers.
Furthermore, the report warned investors about the potential volatility inherent in assets influenced by trends and influencers.
While initially attractive, such investments can incur substantial losses as market dynamics evolve rapidly.
The cryptocurrency industry is closely monitoring developments in the Bitcoin ETF arena.
Senior Bloomberg ETF analyst Eric Balchunas anticipates that most applicants meeting the regulator’s prerequisites before December 29 will gain approval in the coming week.
This development adds an element of anticipation to the crypto market, as the potential approval of these ETFs could further legitimize and mainstream the cryptocurrency space.
However, the SEC’s latest warning serves as a reminder to investors to exercise caution and not succumb to FOMO-driven decisions.
Discover the Crypto Intelligence Blockchain Council
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
Read on Crypto Intelligence Investment Disclaimer