SEC's 'Say No To FOMO' Warning Reissued Ahead Of Potential Bitcoin ETF Greenlight

In anticipation of the approval of spot Bitcoin BTC/USD exchange-traded funds (ETFs), the Securities and Exchange Commission (SEC) has reiterated its warning against FOMO (Fear of Missing Out) cryptocurrency investing.

What Happened: According to a Cointelegraph report on Wednesday, the SEC’s Office of Investor Education reminded investors about the risks associated with digital assets such as cryptocurrencies, meme stocks, and Non-Fungible Tokens (NFTs). This renewed caution preempts the expected endorsement of spot Bitcoin (BTC) exchange-traded funds.

The SEC initially published the “Say no go to FOMO” blog post on January 23, 2021, amidst a robust crypto and equities bull market. The warning was reiterated in March 2022 as the markets began to stabilize. The most recent warning also underscored the influence of celebrities and athletes in the promotion of crypto assets and implored investors not to base financial decisions exclusively on these endorsements.

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Speculation is rife among social media users that this warning might be a signal of the SEC’s looming approval of one or more spot Bitcoin ETFs, with a decision projected to arrive by January 10.

The SEC has a history of imposing fines and penalties on celebrities who promote certain cryptocurrencies without disclosing their remuneration.

In 2021, Kim Kardashian consented to pay a $1.26 million settlement to the SEC for promoting a fraudulent token called Ethereum Max (EMAX) without disclosing her $250,000 payment.

Why It Matters: The SEC additionally cautioned investors about the potential volatility of assets that are heavily influenced by “trends and influencers”, warning that while these might initially seem attractive, losses can quickly pile up as the market shifts.

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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.