SEC’s Reiterates FOMO Caution
The United States Securities and Exchange Commission (SEC) has reiterated its warning regarding FOMO-driven crypto investing. This announcement adds to the buzz surrounding the much-anticipated approval of spot Bitcoin exchange-traded funds (ETFs).
In a recent communication via social media channels, the SEC’s Office of Investor Education flagged the risks tied to digital assets and nonfungible tokens (NFTs), urging retail investors to exercise caution despite heightened market excitement. This warning echoes an earlier advice from January 2021 during a bullish market run that saw Bitcoin, Ether, and various altcoins soaring to new record highs later that year.
Notably, the top financial regulator in the US issued a similar warning around March 2022, even though the market was on a downtrend during this period. Meanwhile, industry observers believe that the SEC’s reissued FOMO warning signals an impending approval for one or more spot Bitcoin ETF proposals at its desk. The SEC will decide on some of the spot BTC ETF proposals by January 10.
Celebrity Influence And Regulatory Response
Furthermore, the SEC’s official statement explicitly cautioned against making investment decisions solely based on endorsements from celebrities, athletes, or social media influencers. The warning highlighted instances where celebrities faced penalties for promoting specific cryptocurrencies without adequate disclosure. For example, the report referenced a case involving Kim Kardashian, who, on October 3, 2023, agreed to a $1.26 million settlement with the SEC.
The settlement stemmed from allegations that she failed to disclose a $250,000 payment she received for promoting Ethereum Max (EMAX) to her massive Instagram following. The SEC’s warning also underscored the volatility associated with assets heavily influenced by trends and personalities.
These investors often lose their funds as they can’t keep up with swiftly evolving market dynamics. Meanwhile, a leading ETF analyst at Bloomberg, Eric Balchunas, predicts that most applicants meeting the regulator’s prerequisites before December 29 could get their approvals within this week.
Surge In Holder Numbers Signals Growing Crypto Interest
Furthermore, on-chain data shows that in the first week of 2024, the cryptocurrency market recorded a surge in investor interest and holder numbers across various networks.
Santiment, a renowned on-chain market analysis platform, reported significant growth within specific crypto networks. According to Santiment’s latest market insights, Bitcoin (BTC) and Ethereum (ETH) boasted an impressive rise in holder numbers compared to other cryptocurrencies.
Notably, current CoinMarketCap data shows that BTC is up 6.59% in the last seven days, trading at $45.95K at the time of writing. Per the same data, ETH is down 0.54% in the last seven days and trades at $2.32K
The Sanitment analysis also sheds light on some prominent altcoins. For instance, Ripple’s XRP experienced a remarkable 26% growth in the last 12 months. Also, Cardano (ADA) and Dogecoin (DOGE) recorded growth percentages of +38% and +22%, respectively. Meanwhile, Chainlink (LINK) showcased an 11% rise in the holders count within the same period.
Market Outlook Amidst ETF Speculation
Meanwhile, observers believe that a spot BTC ETF approval would positively impact BTC’s price and the broader crypto market conditions. Analysts further predict that the approval would lead to another strong BTC bullish run, propelled by increased accessibility and investments from about 88% of institutional investors globally.
Despite the bullish sentiment, a few observers believe some traders will seize the opportunity for short-term profits, causing a slight BTC price correction.
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