Social media users have noted that the regulator’s “no go to FOMO” warning coincides with increased anticipation regarding the approval of spot Bitcoin ETFs.
Simply days before the expected approval of spot Bitcoin exchange-traded funds, the United States Securities and Exchange Commission (SEC) has reissued a warning regarding FOMO investing in cryptocurrencies.
The SEC’s Office of Investor Education reiterated its admonishment to retail investors regarding the risks linked to digital assets, such as meme stocks, cryptocurrencies, and nonfungible tokens (NFTs), in a Jan. 6 post to X (formerly Twitter).
However, a “Say no go to FOMO” blog post made one of its earliest appearances on Jan. 23, 2021, during a raging bull market for cryptocurrencies and equities, which witnessed Bitcoin, Ether, and numerous other altcoins reach new all-time highs by November 2021.
A revised warning was issued in March 2022, coinciding with a period of market deceleration.
Meanwhile, several social media users hypothesized that the report might indicate the SEC is nearing approval of one or more spot Bitcoin ETFs, which is currently awaiting a decision before the Jan. 10 deadline.
The cautionary note referred to the endorsement of crypto assets by celebrities and athletes, cautioning investors against basing financial decisions solely on the endorsement of investing opportunities by well-known figures.
“You may see your favorite athlete, entertainer or social media influencer promoting these kinds of investment opportunities. Although it’s tempting, never decide to invest based solely on their recommendation.”
In addition, the regulator has levied fines and penalties against celebrities over the years for their participation in the promotion of particular cryptocurrencies.
Kim Kardashian reached a settlement with the SEC on Oct. 3 of last year, amounting to $1.26 million.
The allegation against her was the failure to disclose that she had been paid $250,000 to endorse a fraudulent token known as Ethereum Max (EMAX) to her 360 million Instagram followers.
Additionally, the report cautioned investors regarding the possible instability linked to assets that experience significant fluctuations owing to “trends and influencers.”
It stated that although such fluctuations may initially appear alluring, they frequently accumulate losses rapidly as the market progresses without them.
The report inquired of its audience, “How would you feel if your investment lost 20, 30, or even 50 percent in a single day?”
Presently, the crypto sector is observing the Bitcoin ETF market with great concern.
Senior Bloomberg ETF analyst Eric Balchunas forecasts that the majority of applicants, or at least those who fulfilled the regulator’s requirements before Dec. 29th, will be approved within the following week.
