(Bloomberg) -- The U.S. Securities and Exchange Commission has a blunt message for investors in mutual funds that have holdings in Bitcoin futures: Beware of the risks.

While the derivatives have become increasingly popular, they’re still based on an asset that’s “highly speculative” and volatile, and which trades in a lightly regulated market, the SEC’s division of investment management said Tuesday in a statement. Investors should weigh their appetite for risk and examine the fund’s disclosures, the agency said.

“Investor protection and assessing the ongoing compliance of these funds is a top priority for the staff,” the SEC said.

The warning comes just weeks after Gary Gensler, who taught classes on digital assets at the Massachusetts Institute of Technology, took over as SEC chairman. His early comments have thrown cold water on speculation that the SEC would quickly approve a Bitcoin exchange-traded fund. Last week, he told lawmakers that the cryptocurrency market “could benefit from greater investor protection.”

On Tuesday, the SEC said it would “consider whether, in light of the experience of mutual funds investing in the Bitcoin futures market, the Bitcoin futures market could accommodate ETFs.” The agency also said staff would:

• Scrutinize the Bitcoin futures market to judge whether it “appropriately” supports mutual fund investments in the derivatives
• Look at funds’ ability to liquidate their derivatives in the cryptocurrency
• Review funds’ valuations of holdings

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