The U.S. Securities and Exchange Commission (SEC) has issued a warning about the risks associated with digital assets, including cryptocurrencies, NFTs, and meme coins, just days before a highly anticipated decision on spot Bitcoin exchange-traded funds (ETFs). The SEC’s Office of Investor Education made the announcement via a social media post on January 6, reminding individual investors to be cautious.
This warning echoes a similar statement made during a bullish market for crypto and stocks on January 23, 2021, which was followed by a significant rise in altcoins until November 2021. The SEC republished the warning during a market downturn around March 2022.
Crypto enthusiasts on social media speculate that the timing of the recent SEC report might be related to the potential approval of one or more spot Bitcoin ETFs before the January 10 deadline.
The SEC’s warning also emphasized the influence of celebrities and athletes promoting crypto assets, advising investors not to make financial decisions based solely on endorsements by public figures. In the past, the SEC has fined celebrities for their roles in promoting certain cryptocurrencies.
The report cautions investors about the volatile nature of cryptocurrencies, which can be heavily influenced by trends and external factors, leading to rapid losses. The crypto industry is currently awaiting the SEC’s decision on Bitcoin ETFs, with some analysts expecting approvals for compliant applicants within the week.
