- 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.
— Gary Gensler (@GaryGensler) January 9, 2024
Crypto asset securities may be marketed as new opportunities but there are serious risks involved.
Read @SEC_Investor_Ed's Director Take:
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
What is an ETF?
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.
Is Bitcoin futures ETF approved?
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.
Is Bitcoin spot ETF approved?
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.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
Bitcoin: Retraces to around $75,000 after hitting new all-time high
Bitcoin (BTC) edges slightly down on Thursday and trades at around $74,900 after hitting a new all-time high (ATH) of $76,400 on Wednesday, buoyed by the victory of the crypto-friendly candidate Donald Trump in the US presidential election.
Ethereum price jump spurs most significant ETF inflows in six weeks
After a positive momentum in crypto markets following the outcome of the US presidential election, spot Ether exchange-traded funds (ETFs) in the United States saw their highest inflows in six weeks.
Top trending meme coins PEPE, BONK, and FLOKI achieve double-digit gains following Trump’s victory
The prices of top trending meme coins Pepe (PEPE), Bonk (BONK) and FLOKI (FLOKI) experienced double-digit gains following Trump’s victory on Wednesday. The technical outlook suggests that the three meme coins hover around key levels, and the breakout could push these coins higher.
SUI hits new all-time high fueled by Trump election win
Sui (SUI) edges down on Thursday and trades at around $2.24 after hitting a new all-time high (ATH) of $2.38 earlier in the day, buoyed by the victory of a crypto-friendly candidate, Donald Trump, in the US presidential election.
Bitcoin: New all-time high at $78,900 looks feasible
Bitcoin price declines over 2% this week, but the bounce from a key technical level on the weekly chart signals chances of hitting a new all-time high in the short term. US spot Bitcoin ETFs posted $596 million in inflows until Thursday despite the increased profit-taking activity.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.