SEC Throws Cold Water On Bitcoin ETF Hopes With Reissuance Of FOMO Warning

Cryptocurrency

A palpable sense of anticipation pervades the financial sector as key stakeholders in the Bitcoin ETF saga successfully navigate the final stages of the Securities and Exchange Commission’s (SEC) rigorous review process.

January 11th looms large on the calendar, marking the potential date for the much-awaited announcement regarding the regulatory body’s decision on these highly sought-after financial instruments.

While whispers of impending approval swirl through the air, the SEC remains characteristically measured in its pronouncements. The Commission, ever mindful of its crucial role in safeguarding investor interests, has explicitly cautioned against undue exuberance, urging market participants to adopt a prudent and measured approach.

SEC: Hold Your Horses On Bitcoin ETF And FOMO

Just days before a potential green light for a Bitcoin ETF, the SEC is throwing cold water on crypto FOMO. In a Jan. 6 post on social media platform X, the regulator reissued a warning highlighting the risks of meme stocks, cryptos, and NFTs, urging retail investors to steer clear of impulsive decisions fueled by hype.

The initial recommendation appeared in a January 2021 blog post, coinciding with the surge in value of Bitcoin and other digital assets. The reissue of the warning at a time when anticipation has been building for the approval of spot Bitcoin ETFs has raised eyebrows.

Lori Schock, the director of the SEC, stressed the significance of not making investing decisions based only on advice from celebrities, such as athletes, entertainers, and social media influencers. The SEC director went into additional detail about the dangers that are specific to the cryptocurrency sector, such as volatility and price swings.

Throughout the years, the Commission has consistently wielded its regulatory authority to impose fines and penalties on celebrities who have been implicated in the promotion of specific cryptocurrencies. This pattern underscores the regulator’s commitment to maintaining a vigilant stance on the promotion and endorsement of digital assets by public figures.

BTC market cap currently at $861.067 billion. Chart: TradingView.com

The regulatory interventions have often been prompted by instances where celebrities, knowingly or unknowingly, have endorsed or advertised cryptocurrencies without adhering to the established legal and ethical standards.

Following charges of not disclosing that she received $250,000 to endorse a fraudulent cryptocurrency named Ethereum Max (EMAX) to her 360 million Instagram followers, Hollywood celebrity Kim Kardashian consented to pay a $1.26 million settlement to the SEC on October 3 of last year.

Anticipation Grows For Bitcoin ETF Nod

Right now, the cryptocurrency community is holding its collective breath while keeping a careful eye on developments in the Bitcoin ETF space. Senior Bloomberg ETF analyst Eric Balchunas has commented on the issue, predicting that a significant number of applicants will probably be approved in the next week.

In particular, he believes that applicants who successfully met the regulatory requirements before to the crucial deadline of December 29 will have a good chance of being approved.

Both industry participants and outsiders have become engrossed in the events that are developing around Bitcoin ETFs. According to Balchunas’ prediction, there may be a shift in the regulatory environment that will lead to a rush of approvals for eligible applications.

Featured image from Shutterstock

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