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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.