SEC chair offers double dose of crypto investment advice ahead of possible spot Bitcoin ETF approvals
- Gary Gensler has for the second time warned crypto market participants of the risks involved in crypto investing.
- After citing possible incompliance, market risk and fraud, the SEC chair reiterated the need for caution.
- The cautionary message comes ahead of possible spot Bitcoin ETF approvals.
As the gap for spot Bitcoin exchange-traded funds (ETFs) continues to narrow, all eyes are peeled on the US Securities & Exchange Commission (SEC) with markets anticipating a decision on ETF approvals this week. The chair of the commission, Gary Gensler, is a person of interest on the subject, with the buck stopping with him to break the news even as the commissioners prepare for a vote, according to Reuters.
Gary Gensler warns of crypto investment risks ahead of possible spot Bitcoin ETF approvals
In a January 8 post on X, Gensler articulated the risks associated with investing in cryptocurrency, citing dangers related to market volatility, platform incompliance, and fraud, while reiterating how crypto platforms have become insolvent.
Bringing investors’ attention to how fraudsters prey on unsuspecting retail investors by leveraging the rising popularity of crypto assets, Gensler wrote, “These investments continue to be replete w/ fraud- bogus coin offerings, Ponzi & pyramid schemes, and outright theft where a project promoter disappears w/ investors’ money.”
In the latest of his cautionary words to the market participants, Gensler notes, “Crypto asset securities may be marketed as new opportunities[,] but there are serious risks involved.”
If you’re considering an investment involving crypto assets, be cautious.
Crypto asset securities may be marketed as new opportunities but there are serious risks involved.
Read @SEC_Investor_Ed‘s Director Take:
— Gary Gensler (@GaryGensler) January 9, 2024
The executive commissioner stressed, “Never make an investment decision based solely on celebrity endorsements.”
The sentiments come ahead of possible spot BTC ETF approvals and their subsequent launch. The market has registered growing hype around a spot Bitcoin ETF in the US. It remains unclear whether the approvals will arrive as expected, but industry-wide experts hold fast to their earlier predictions of approvals between January 5 and 10.
Wednesday, January 10, will be a day to watch even as frontrunners anticipate trading to begin as early as Thursday morning.
Elsewhere, Peter Schiff joins experts to indicate that the approval of multiple US-listed spot Bitcoin ETFs could happen on Wednesday, highlighting that the only success of BTC has been as a means of speculation. With this, he believes that a spot BTC ETF approval could pave the way for a “new group of gamblers to enter the casino.”
The approval of multiple, U.S. listed spot #BitcoinETFs may happen tomorrow. Since #Bitcoin failed as a digital currency, its only success has been as a means of speculation. The hope is that these ETFs will open a door that will allow a new group of gamblers to enter the casino.
— Peter Schiff (@PeterSchiff) January 9, 2024
Schiff is an economist and global strategist, according to his X profile, and is widely known for his favoring of gold above other investments and his general pessimism concerning global markets.
Crypto ETF FAQs
An Exchange-Traded Fund (ETF) is an investment vehicle or an index that tracks the price of an underlying asset. ETFs can not only track a single asset, but a group of assets and sectors. For example, a Bitcoin ETF tracks Bitcoin’s price. ETF is a tool used by investors to gain exposure to a certain asset.
Yes. The first Bitcoin futures ETF in the US was approved by the US Securities & Exchange Commission in October 2021. A total of seven Bitcoin futures ETFs have been approved, with more than 20 still waiting for the regulator’s permission. The SEC says that the cryptocurrency industry is new and subject to manipulation, which is why it has been delaying crypto-related futures ETFs for the last few years.
Bitcoin spot ETF has been approved outside the US, but the SEC is yet to approve one in the country. After BlackRock filed for a Bitcoin spot ETF on June 15, the interest surrounding crypto ETFs has been renewed. Grayscale – whose application for a Bitcoin spot ETF was initially rejected by the SEC – got a victory in court, forcing the US regulator to review its proposal again. The SEC’s loss in this lawsuit has fueled hopes that a Bitcoin spot ETF might be approved by the end of the year.