SEC Warns Bitcoin Futures Are Highly Speculative
Main page News, Cryptocurrency, Bitcoin-ETF, Regulations
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12 May
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The US Securities and Exchange Commission has warned investors in mutual funds holding Bitcoin futures about the risks associated with derivatives.

According to a statement shared by the regulator, even though these investment instruments are becoming increasingly popular, they are based on a "highly speculative" and volatile asset that is traded in a poorly regulated market.

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Furthermore, the SEC has added that:

"As with any fund investment, investors should focus on the level of risk they are taking on, and the level of risk they are comfortable taking on, prior to making an investment. Investors should consider the volatility of Bitcoin and the Bitcoin futures market, as well as the lack of regulation and potential for fraud or manipulation in the underlying Bitcoin market."

The regulator says it has issued this warning because "investor protection and assessing the ongoing compliance of these funds is a top priority for the staff."

The SEC also intends to examine the ability of the Bitcoin futures market to support ETFs, "which, unlike mutual funds, cannot prevent additional investor assets from coming into the ETF if the ETF becomes too large or dominant in the market, or if the liquidity in the market starts to wane."

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