186 Interactions, 4 today
The crypto-market has been rallying recently, and many people are now really interested in how they can exploit their positions in the market. Ripple’s Chief Technology Officer, David Schwartz, recently decided to debunk some industry theories, especially those concerning HODLing.
The CTO tweeted,
“I keep hearing that you can’t lose money if you don’t sell. That’s nonsense and needs to be put to death for good. To a first approximation, anyone who has $500 can trade it for $500 worth of crypto. Anyone who has $500 worth of crypto can trade it for $500.”
According to Schwartz, there isn’t much of a difference between people holding fiat or crypto for the same amount of money. Traders, he claims, often misinterpret market trends by hanging onto crypto even though its value falls. Schwartz called it ridiculous and pointed out that this means you’re wasting money.
“So if you bought $1,000 worth of crypto and its price dropped to $500, you went from no better and no worse off than someone with $1,000 to no better and no worse off than someone with $500. To say that that’s not losing money is completely absurd.”
“That’s what I’ve been doing with my Bitcoin. At $100, at $250, at $750, at $2,500, at $7,500, at $20,000, and at $50,000. Now it’s at $63,000 and I have like 2% of it left.”
However, with Bitcoin’s value climbing to touch a new all-time high recently, there were some regrets about selling the coin sooner. It is, as Schwartz said, “the downside of de-risking.”
There has been a lot of speculation around HODLing one’s cryptocurrency, but many traders inevitably run their assets into the ground without making a return. According to the executive, the holding would make sense if the consumers are focused on the upside potential and are willing to accept the risks. Many who assume that “selling is selfish or a sign of weakness,” on the other hand, must be corrected, he says.
Though Schwartz has expressed sorrow about selling his Bitcoin, some in the group have reminded him of the $90 million loss he suffered when he closed out his Ethereum stake years ago. Just under 24 hours ago, the cryptocurrency market experienced a significant increase in value, with the second-largest cryptocurrency reaching an all-time high of $2,487 on the charts.
Commenting that he took the safer path, Schwartz responded by stating that the sale was “a mistake.”