SEC Chairman Gary Gensler has issued another cautionary message to crypto investors, urging them to be wary of the risks involved in crypto asset securities. This is the second day in a row that Gensler has tweeted such a warning, sparking speculation that he is preparing the market for a possible approval of a Bitcoin spot ETF.
Similar Messages for Two Consecutive Days
The issue of the tweet by Gensler is that he is warning crypto investors about the dangers and risks of crypto asset securities, such as fraud, manipulation, custody, and market surveillance. He has tweeted similar messages for two consecutive days, which some people interpret as a sign that he is preparing the market for a possible approval of a Bitcoin spot ETF.
The summary of Gensler’s latest warning, which is actually an article written By Lori Schock, Director of the SEC’s Office of Investor Education and Advocacy:
- With cryptocurrrency, you may not know who you’re dealing with, where you’re money is going and what returns you’re expecting.
- “Just because your favorite celebrity says a product or service is a good investment doesn’t mean it is. Always do thorough, independent research of the product.”
- You should understand if you lose money there is a real chance the SEC and other regulators won’t be able to help you recover your investment, even in cases of fraud.
A Bitcoin spot ETF is an exchange-traded fund that tracks the current price of Bitcoin, rather than futures contracts based on its price. Unlike futures-based ETFs, which have already been approved by the SEC, a spot ETF would own actual Bitcoins as the underlying asset.
Tweet not Indicative of Certainty of an Approval
The implication of Gensler’s tweet is that he may be trying to balance the interests of crypto enthusiasts and investors, who see a spot ETF as a game-changer for the industry, and the regulators and lawmakers, who have concerns over the security and stability of the crypto market. By issuing warnings, he may be trying to temper the expectations and protect the investors from potential losses, while also signaling that he is open to innovation and competition in the financial sector.
However, Gensler’s tweet is not a definitive indication of an approval, as the SEC has been reluctant to approve a spot ETF in the past, citing various reasons. Several applications for a spot ETF have been rejected or delayed by the regulator, despite the growing demand and interest from the public.
Hacked SEC’s Tweet Influence
Moreover, Gensler’s tweet may have been overshadowed by a recent incident, where the official SEC Twitter account was compromised and posted a false announcement of a spot Bitcoin ETF approval. This caused a brief spike in the price of Bitcoin, followed by a drop after the SEC denied the post. The incident raised questions about the SEC’s security and credibility, and provoked criticism from some crypto supporters and politicians.
Therefore, the issue of the tweet by Gensler and its implication are complex and uncertain, and the market should be cautious and vigilant about the developments and decisions regarding the Bitcoin spot ETF.