The United States SEC has called on traders to know that BTC and all transaction that is Bitcoin-based is a risky venture. The commission stated that lack of control, excess price uncertainty, forgery, and many others are problems associated with Bitcoin.
According to Investors Alert yesterday’s publication, the commission listed important points which traders are to take note of before engaging in any BTC-based transaction. This is due to the risks involved in the crypto market.
The recent caution noted that even though other investments have their own associated risk, BTC is more perilous when weighed with others. This caution from SEC comes after a note was sent previously advising traders to have a rethink before getting involved in Bitcoin due to the perils involved.
The commission emphasized that the value of BTC most times doesn’t equate with the worth of the futures contract prices which differs by the time it was delivered, and not the same as the spot price.
The publication also stressed that traders should consider the worth of risk they venture into in comparison with the risk they can withstand. This led to an amusing reaction on social media, with Nassim Taleb, a finance risk researcher, noting that he was happy that SEC was in existence.
This is the 2nd time within this week that the United States regulators have openly made statements that are not in support of crypto investments. On Tuesday, the commissioner of the Commodity Future Trading Commission, Dan. Berkovitz, noted that he acknowledged that DeFi for offshoots is not a good idea and is not authorized by the CEA.
The owner and Chief Executive Officer of Avanti Financial, Caitlin Long, has been focused on opinions from open statements released by the United States administrative councils amidst the regulatory crackdown.
She noted that SEC was giving the caution to onshore transactions, which delivers only around 2.5x leverage, a number much less than what is obtainable from offshore transactions.
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