U.S. Securities and Exchange Commission (SEC) chairman Gary Gensler issued a warning about the dangers of cryptocurrency investments on January 8, 2024, only two hours after big Wall Street firms submitted revised management fees for their Bitcoin spot ETFs.
Gensler outlined three major dangers that bitcoin investors should be aware of in a post on X (previously Twitter):
A thread 🧵
Some things to keep in mind if you’re considering investing in crypto assets:
— Gary Gensler (@GaryGensler) January 8, 2024
Exchanges and suppliers of crypto assets may be in violation of current regulations, particularly those pertaining to federal securities laws. Investors in cryptocurrencies should be aware that their capital is not safeguarded by the laws of the country.
There has been a decline in the value or bankruptcy of some prominent cryptocurrency systems and assets. Cryptocurrency market investments are very unpredictable and fraught with danger.
There has been an uptick in security breaches, Ponzi schemes, and cryptocurrency frauds. The promoter of a cryptocurrency business may vanish with the investors’ money.
2⃣ Investments in crypto assets also can be exceptionally risky & are often volatile. A number of major platforms & crypto assets have become insolvent and/or lost value. Investments in crypto assets continue to be subject to significant risk.
— Gary Gensler (@GaryGensler) January 8, 2024
The tweet by Gensler did not include the word “Bitcoin ETF,” but it was published only two hours after several prominent Wall Street companies disclosed revised management costs for their Bitcoin spot ETFs. Before the SEC decides whether or not to approve the petitions, this is the last stage.
The SEC now has enough information to decide whether to accept the 19b-4 and S-1 filings, since all the required documents are now available. U.S. banking regulators still have the option to reject or postpone a judgment.
The chances of the SEC approving a Bitcoin spot ETF in January 2024 have increased from 90% to 95%, according to Bloomberg ETF expert Eric Balchunas.
Organizations including BlackRock/iShares, Franklin Templeton, Ark Invest/21Shares, WisdomTree, Invesco/Galaxy, Fidelity, Bitwise, Hashdex, and Valkyrie (Grayscale submitted a simplified S-3) have applied to the SEC, although it is unclear whether they will approve any of their applications at this time.
The announcement of a Bitcoin spot ETF has garnered a lot of attention from investors looking to put money into the emerging cryptocurrency market.
But not everyone is ecstatic or thinks this is good news for the bitcoin market. For instance, a week ago, Bitcoin’s price fell by over four thousand dollars due to the Matrixport investment fund’s unfounded forecast that the SEC will reject all applications for Bitcoin spot ETFs.