The cryptocurrency space has suddenly become one of the most sought-after investment spaces globally, as many investors are beginning to prioritize digital assets over traditional assets like stocks, equities, and bonds. However, the implication of this new trend is that the investors now prefer to custody these digital assets like Bitcoin, Ethereum, and co. in their wallets, over owning traditional assets. However, despite the frenzy around the digital assets, Ripple Labs Chief Technology Officer (CTO)- David Schwartz believes that crypto investors should consider trading off part of their digital assets.
Schwartz believes selling off a portion of your crypto is a risk-friendly decision
The typical nature of trade in the cryptocurrency market involves retailers and investors buying cryptocurrencies at the dip and selling them when the price goes up. However, Ripple CTO believes this trend should be modified, as he has now advised crypto holders to consider selling off a portion of their assets due to the market’s instability.
In his official tweet to his followers, the software engineer and crypto trader advised his followers with a fat crypto balance to please consider selling off a few of it. He believes that by selling off a portion of their digital assets, they will be limiting their exposure to the risk of losses.
Schwartz believes, despite the crypto market being a very profitable ground and has been successful for a while, there is still a possibility that the market will likely crash anytime soon. Hence, why he feels that selling off a portion of your assets will limit the risk, should that ever happen. Alternatively, Schwartz believes that the volatility of the market means that anything can happen at any time, and this is why crypto investors would be doing themselves good to sell off portions of their assets now.
Schwartz’s advice is flawed by the rapid boom of the cryptocurrency space
In his tweet, Schwartz believes that those that need his advice the most are individuals with at least half a year of their earnings invested in cryptocurrency. He feels that should anyone have more than six months of their annual earnings in crypto, they are exposing themselves to very high investment risk. The Ripple CTO believes that individuals with debts and are investing highly in cryptocurrencies should re-consider their stance with the digital assets, as prioritizing their debt repayment should be high on their priority list.
However, while Schwartz’s words may come off as sound advice, there is no evidence that crypto investors from the last five years will incur any losses from their investment. For example, Bitcoin, which has recently hit a new ATH and currently trading at $64,478 at the time of writing, has witnessed a price increase of more than 900% since December 2019.
On the other hand, Ripple’s XRP- which also has affiliation to Schwartz, has also witnessed a massive price rise of more than 1,000% in the same period. However, despite the rapid rise of fortunes of these digital assets, anything could still happen. Fortunately, there are no indications that currently suggest that the crypto market’s volatility will likely have any causation effect on investors’ fortunes, as the market fortunes are looking good at the moment.