Bitcoin’s Soaring Price Is a Warning Sign For Investors

Bitcoin Soars to $68,000
Warning from the U.S. Securities and Exchange Commission
What to Be Aware of Before Investing?

The price of Bitcoin, the leading cryptocurrency, hit a record high of $68,000 at 4:51 PM on the 4th. It was $65,000 last week, but it has jumped significantly. Analysis has poured in that it has broken through $70,000 due to the scary surge. Some are emphasizing the risks, fearing “overheating.”

In this regard, the “Cryptocurrency Investment Warning” from the U.S. Securities and Exchange Commission (SEC) is being highlighted again.

In March last year, the U.S. Securities and Exchange Commission (SEC) posted an article titled “Beware of Cryptocurrency Securities: Investor Warning” on its official website.

The SEC stated in the preamble, “Investment in crypto asset securities can be highly volatile and speculative, and the platform may lack important protective measures for investors.” It added that investors should understand the following points.

First, the SEC mentioned that those who invest in or provide services for crypto assets may not comply with relevant laws, including federal securities laws.

To register a securities offering, the issuer must disclose critical information, but unregistered commodities of crypto asset securities may not be able to provide the vital information necessary for investors to make informed decisions.

In particular, cryptocurrency asset corporations are not registered with the SEC on national securities exchanges such as the New York Stock Exchange and the Nasdaq securities market. Currently, no U.S. securities exchange trades cryptocurrency asset securities.

Therefore, there are no regulations to protect investors if they fall victim to fraud, manipulation, insider trading, and other illegal activities.

The second warning is, “Investment in crypto asset securities can be hazardous and often volatile.” The risk of cryptocurrency companies going bankrupt, specific cryptocurrency securities markets disappearing completely or becoming untradeable, technical defects, and hacking is higher than stocks and funds.

It also states that fraudsters exploit the popularity of cryptocurrency assets to lure individual investors into scams. They point to crimes such as offering fake coins, Ponzi and pyramid scams, and blatant theft, where project planners disappear with investors’ money.

In South Korea, frequent fraud cases are called “scam coins.” Recently, there was controversy over the “Winners Coin,” promoted by some celebrities and YouTubers.

The SEC pointed out that making an investment decision just because a celebrity says it’s a “good investment” is never a good idea.

Lastly, the SEC advised, “Setting an investment plan and understanding the risk tolerance and duration can be very important for successful investment.”

It recommended establishing and following an investment plan and adding that temporary emotions about investment should not interfere with long-term goals. If you are considering investing, you should consider how much of your total portfolio to allocate to this type of investment.

Meanwhile, Bitcoin’s halving is scheduled for April. Halving refers to the period when mining rewards are cut in half. Multinational investment bank J.P. Morgan predicts that the price of Bitcoin will drop to around $40,000 after halving.