As the Bitcoin spot ETF is expected to be approved for listing this week, Gary Gensler, the chairman of the U.S. Securities and Exchange Commission (SEC), tweeted today to issue a risk warning for cryptocurrency investments. This is considered by the market to be another sign that the Bitcoin spot ETF is likely to be approved.
During this critical period, the SEC will decide whether to reject or approve the Bitcoin spot ETF application from Ark Investment/21Shares by January 10th. Currently, a total of 14 asset management firms are seeking to issue Bitcoin spot ETFs, and it is widely believed that the SEC will approve several of them simultaneously.
At this crucial moment, Gary Gensler, the chairman of the SEC, tweeted to remind investors who are considering investing in cryptocurrency assets to pay attention to the following points:
1. Those who provide cryptocurrency asset investments/services may not comply with applicable laws, including federal securities laws. Investors in cryptocurrency securities should understand that they may be deprived of key information and other important protections related to their investments.
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 increasing popularity of cryptocurrency assets to lure retail investors into scams. These investments continue to be filled with fraudulent activities such as forged token issuance, Ponzi schemes, pyramid schemes, and project initiators disappearing with investors’ money.
It is worth noting that the SEC previously issued risk warnings before the approval of Bitcoin futures ETFs. Therefore, Gary Gensler’s above-mentioned reminders are considered by the market to be another sign that the Bitcoin spot ETF is about to be approved.
Including BlackRock, 11 issuers have submitted S-1 amended filings for Bitcoin spot ETFs to the SEC before the final deadline last night. Bloomberg ETF analyst Eric Balchunas previously pointed out 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 11th, the SEC can make decisions using its authorization policy without necessarily voting.
Eric Balchunas expects that most applications that meet the SEC’s requirements will be approved this week, or at least submitted before December 29th, and the SEC may make a decision on Grayscale’s GBTC conversion to Bitcoin spot ETF after the first ETF application is approved.
Previously, the SEC’s Office of Investor Education republished a warning on January 6th regarding not FOMO-ing into cryptocurrency investments, reminding retail investors to be aware of 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 reposted this article in March 2022 when the market declined, and now the SEC has reissued the old article, which is also seen by the market as a possible move to issue a risk warning before the approval of the Bitcoin spot ETF.
The article mentions that investors may see their favorite athletes, artists, or influencers promoting such investment opportunities. Although this is tempting, it is never advisable to make investment decisions based solely on recommendations. Many trend-driven investments experience substantial fluctuations.