As the Bitcoin spot ETF is expected to be approved for listing this week, Gary Gensler, Chairman of the U.S. Securities and Exchange Commission (SEC), tweeted today to issue a risk warning regarding cryptocurrency investments. This is seen by the market as another sign that the Bitcoin spot ETF may be approved.
The application for the Bitcoin spot ETF is at a critical moment, and the SEC will decide whether to reject or approve the application by Ark Investment/21Shares before January 10. Currently, a total of 14 asset management institutions are seeking to issue Bitcoin spot ETFs. It is widely believed that the SEC will approve several ETFs simultaneously.
At this crucial moment, Gary Gensler, Chairman of the U.S. Securities and Exchange Commission (SEC), tweeted a reminder today for investors considering investing in cryptocurrency assets to remember the following points:
1. Those who provide cryptocurrency asset investment/services may not comply with applicable laws, including federal securities laws. Cryptocurrency asset investors should understand that they may be deprived of key information related to their investments and other important protections.
2. Investments in cryptocurrency assets may also have extremely high risks and are often highly volatile. Many major platforms and cryptocurrency assets have gone bankrupt and/or lost value. Investments in cryptocurrency assets continue to face significant risks.
3. Fraudsters continue to take advantage of the growing popularity of cryptocurrency assets to lure retail investors into scams. These investments continue to be filled with fraudulent activities, including fake token issuance, Ponzi schemes, pyramid schemes, and project initiators disappearing with investors’ money.
It is worth noting that the SEC previously issued risk warning alerts before the approval of Bitcoin futures ETFs. Therefore, Gary Gensler’s above reminder is seen by the market as another sign that the Bitcoin spot ETF is about to be approved.
Eleven issuers, including BlackRock, submitted S-1 amendment documents for the Bitcoin spot ETF to the SEC before the deadline last night. Eric Balchunas, Bloomberg’s ETF analyst, previously stated that the next stage of the decision-making process will be the vote of the SEC commissioners. Although there are no arrangements on the SEC’s public agenda before January 11, the SEC can make decisions using its authorization policy without necessarily voting.
Eric Balchunas expects that most applications, or at least those that meet the SEC’s requirements, submitted before December 29, will be approved this week. After the first ETF application is approved, the SEC may make a decision on Grayscale’s GBTC conversion to Bitcoin spot ETF.
Prior to this, the SEC’s Office of Investor Education reissued a warning on January 6 regarding the FOMO investment in cryptocurrencies, reminding retail investors to pay attention to the risks associated with digital assets and mentioning meme stocks, cryptocurrencies, and NFTs in the article.
This article was first published on January 23, 2021, when cryptocurrencies were in a bull market. The SEC later reshared this article when the market fell in March 2022. Now, the SEC has reissued the old article, which is also seen by the market as a pre-emptive release of risk warnings before the approval of the Bitcoin spot ETF.
The article mentions that investors may see their favorite athletes, artists, or internet celebrities promoting such investment opportunities. Although this is tempting, it is never advisable to make investment decisions solely based on recommendations. Many of these trend-driven investments experience significant volatility.