SEC Issues “Crypto Investing” Caution, Positive Bitcoin ETF Signal Ahead?

Bloomberg’s Eric Balchunas recently referenced a post made by the United States regulator, the Securities and Exchange Commission (SEC), where the agency advised investors to be cautious in crypto securities investments, marking a likely signal for spot Bitcoin ETF approval.

Is Spot Bitcoin ETF Approval Incoming?

According to SEC posts, cryptocurrencies are one of the most risky types of investments owing to their volatile nature. In a published statement titled “Exercise Caution with Crypto Asset Securities: Investor Alert”, the SEC’s Office of Investor Education and Advocacy urged investors to remain vigilant if they are considering an investment involving crypto asset securities.

Balchunas pointed to the fact that the SEC also released related crypto educational materials just before ProShares’ Bitcoin Futures ETF ‘BITO’ which hit a new all-time high recently, was approved. Looking at the history, this could be the cue that the crypto landscape is on track in its expectation of a spot Bitcoin ETF approval soon. 

The Senior Bloomberg ETF Analyst and many other crypto experts remain positive that the approval will be granted in the first few weeks of 2024. 

Meanwhile, the SEC tagged crypto assets as “volatile” and “speculative”, suggesting that they have no true underlying value. To buttress its arguments, the regulator recounted the bear market of last year including the numerous bout of insolvency and bankruptcies which triggered the prices of different cryptocurrencies to dip.

Till this point, many of the victims of the crypto landslide of 2022 are still trying to get back on their feet and re-establish their position in the market. To add some glimmer of hope, crypto lender Celsius Network recently had its restructuring plan approved by the bankruptcy court after more than one year of its collapse. In the same significant development, Bittrex secured court approval for its revised bankruptcy plan under Chapter 11.

Famous cryptocurrency exchange FTX is still pushing its restructuring plan but intends to submit it to the bankruptcy court this December. 

SEC Wants Crypto investors to Stay Vigilant

Furthermore, the SEC stated that investor protection is sometimes not the focus of crypto exchanges and trading platforms that users leverage times to buy, sell, borrow, or lend these securities. Hence, investors stand at a greater risk of losing their assets.

“Those offering crypto asset investments or services may not be complying with applicable law, including federal securities laws,” the SEC added while trying to explain that it is a requirement for digital asset service providers, precisely securities, to register their business with the agency or other authorized bodies.

SEC’s concluding advice for these investors is to put only money that they are not scared of losing in crypto.