SEC Alerts Investors against FOMO Amid High Anticipation on a Spot Bitcoin ETF Approval
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The US Securities and Exchange Commission (SEC) has issued a warning against the “Fear of Missing Out” as crypto investors eagerly await the regulator’s decision on a spot Bitcoin exchange-traded fund (ETF).
In a tweet published last Friday, the SEC urged investors to be cautious when interacting with “particular investments,” as what might be the right opportunity for one person is not necessarily suitable for another.
“NO GO to FOMO” (fear of missing out),” the SEC tweeted. “Just because others might buy a particular investment doesn’t mean it’s the right opportunity for you.”
SEC Warns Against FOMO
The securities regulator first issued a warning against FOMO in early 2021. At the time, the cryptocurrency and stock markets were on an uptrend. Despite the regulator’s warning, Bitcoin and other crypto assets rallied to reach all-time highs by the end of 2021.
The timing of the recent SEC tweet coincided with increased volatility in the cryptocurrency market as investors eagerly await the approval of a spot Bitcoin ETF. If this product is approved, it will be the first in the US. It will also mark the first step towards regulatory clarity.
In a recent blog post, the SEC warned, “Buying and selling investments along with trends and influencers because of a fear of missing out isn’t the best way to plan for a strong financial future. Market swings are inevitable.”
The SEC did not mention any crypto assets in its recent blog post. However, it has previously issued an alert on FOMO mentioning cryptocurrencies and meme stocks. The warning also comes as Bitcoin records gains in anticipation of the Bitcoin ETF. Bitcoin is up 158% year-to-date.
Markets Await the SEC’s Approval on a Spot Bitcoin ETF
The SEC will decide whether to approve or reject a spot Bitcoin ETF this week. The regulator faces a January 10 deadline to make this announcement.
Several investment funds have filed for spot Bitcoin ETFs, including the world’s largest asset manager, BlackRock. The SEC has previously rejected applications filed for this product, but optimism has built up this time after a court termed a previous rejection of the Grayscale Bitcoin ETF wrong.
The anticipation has seen a notable recovery in Bitcoin over the past few months. The king of cryptocurrencies recently crossed $45,000, its highest level in two years.
