As the decision on a first Bitcoin Spot ETF draws closer, the Securities and Exchange Commission (SEC) is calling on investors to resist the frenzy. In a recent press release, she warns against the risks of giving in to FOMO, the “fear of missing out”.
SEC curbs crypto boom for Bitcoin ETF
The American Securities and Exchange Commission (SEC) yesterday published a press release with the evocative title: “No Go to FOMO”. A warning to investors to resist fear of missing out (FOMO) regarding cryptos and other digital assets.
This warning comes at a critical time. The stock market regulator is in fact preparing to rule on a highly anticipated request: the approval of the first ETF backed by the spot price of Bitcoin (Bitcoin Spot ETF).
However, in contrast to these calls for caution, enthusiasm is at its peak among players in the cryptocurrency market. Most anticipate the imminent green light from the SEC, a decision that would mark a turning point and pave the way for mass adoption of Bitcoin.
In his communicated, the stock market policeman nevertheless points out the risks inherent in these cryptos. It highlights their extreme volatility and their dependence on fashion effects.
According to the SEC, many tokens such as NFTs, memes or ICOs essentially owe their speculative value to their popularity alone. Their price can thus fluctuate spectacularly, with variations of -50% in one day.
Faced with this unbridled enthusiasm, the SEC therefore calls on investors to exercise caution and develop diversified, much less risky strategies. She clearly fears a speculative bubble around Bitcoin, the possible validation of an ETF of which would only accentuate the volatility.
Unbridled optimism among investors
The January 15 deadline is fast approaching. Some players believe that the SEC will give the green light, opening the door to widespread adoption by institutions, marking a significant turning point for the market.
This unbridled enthusiasm shines through in the frenetic activity of the Bitcoin derivatives market. According to analyzes from Deribit, the world leader in the sector, purchase options at $50,000 are particularly popular there.
Many investors seem to be betting big on a powerful bullish rally if the famous ETF is given the green light. Some speculators are even talking about a possible historic record above $68,000, the peak reached in November 2021 during the previous bull run.
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