Schwartz’s statement came in response to a tweet from an XRP investor undertaking a month-long de-risking strategy.
The broader cryptocurrency market is facing a massive downturn, and XRP has not been spared in the onslaught. Amid this prevailing downtrend, David Schwartz, CTO at Ripple, has stressed the importance of employing a de-risking strategy even with one’s XRP holdings.
Schwartz disclosed this in a recent tweet in response to a statement from an XRP investor who disclosed that he had undertaken a month-long de-risking strategy on his XRP holdings.
Sir Clown Sniper, a pseudonymous XRP investor, recently revealed that up to 55% of his XRP holdings stopped out as XRP dropped to the $0.49 mark. While this isn’t generally a bullish outcome, the investor noted that he feels much better having less exposure to XRP. He also disclosed that he’s been de-risking his XRP position in the past month.
55% of my $XRP bag stopped out at .49 I feel much better with less exposure, I've been de-risking for a month now. pic.twitter.com/HpFutshcvA
— ⌖ Sir Clown Sniper ⌖ (@SirClownSniper) April 20, 2023
David Schwartz responded to this disclosure, noting that employing a strategy to minimize risk exposure to an asset is a “rational and smart” decision for an investor.
However, he emphasized that investors hesitate about employing this strategy regardless of whether the market is experiencing an uptrend or a downtrend.
” De-risking is rational and smart. And there will *never* feel like a good time to do it. Market’s high? Maybe it’ll go higher. Market low? Why sell when the market’s low,” he remarked, highlighting the apprehensions that often accompany investment decisions.
De-risking is rational and smart. And there will *never* feel like a good time to do it. Market's high? Maybe it'll go higher. Market's low? Why sell when the market's low?
— David "JoelKatz" Schwartz (@JoelKatz) April 21, 2023
De-risking is a strategy investors employ to minimize the risks associated with a particular asset, in this case XRP. This can include diversifying one’s portfolio or using risk management tools like stop-loss orders, among other moves. The goal is to minimize potential losses while maintaining exposure to the potential upside of the asset.
XRP Caught in the Market-wide Slump
Schwartz’s remarks come amid the prevalent market-wide slump that has battered XRP to a 4-week low of $0.4637. Despite the bulls’ resilience to keep the asset’s price up, XRP broke below the $0.48 price level for the first time this month.
Recall that veteran analyst Egrag previously predicted that a drop to $0.40 for XRP was still possible at a time when the asset was trading at the $0.50 level. According to Egrag, this slump would not necessarily invalidate the asset’s projected rally in the future, as he asserted that XRP below $1 presents a life-changing opportunity for investors. XRP is trading for $0.4644, down 4.16% in the past 24 hours.
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Disclaimer: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic’s opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.