The US Securities and Exchange Commission (SEC) has warned investors not to succumb to FOMO (fear of missing out) and not take risks by investing in memcoins or non-fungible tokens..
SEC Director of Investor Education and Advocacy Lori Schock has published an announcement for those wishing to invest in crypto assets. If some investors know how to invest in digital assets, then this may become a risky strategy for other investors. Lori Schock advised against the growing interest in digital assets, especially memcoins, NFTs and initial coin offering (ICO) tokens.. NFTs should be thought of as a way to own digital works of art and memorabilia, but not as an object of speculation.
SEC top manager stressed: investment decisions should not be based on recommendations of celebrities, athletes, artists and other influencers on social networks. The best way to protect yourself during market fluctuations is to create an investment portfolio that includes a variety of assets, including stocks and bonds. It is important to diversify investments within one asset class, for example, not to invest all your money in one or two stocks, advises an SEC employee.
“Market fluctuations are inevitable. Crypto assets considered fashionable investments may experience high volatility. We've already seen record highs and record lows. Such investments may seem attractive at first, but how will you feel if your investment loses 20%, 30% or even 50% in one day?
Last year, the SEC proposed tightening requirements for cryptocurrency investment advisers and expanding responsibility for providing custodial protection.