Ripple Labs CTO David Schwartz is giving some reasonably sound investment advice, though it comes at a strange time for the payments network.
“If you have life-changing amounts of cryptocurrency, please take some time to seriously consider selling some to reduce your risk and exposure,” tweeted Schwartz, before adding: “This is not any kind of prediction about what the market will do.”
This is probably going to be my least popular tweet ever, but: If you have life-changing amounts of cryptocurrency, please take some time to seriously consider selling some to reduce your risk and exposure. This is not any kind of prediction about what the market will do.
— 𝘋𝘢𝘷𝘪𝘥 "𝘑𝘰𝘦𝘭𝘒𝘢𝘵𝘻" 𝘚𝘤𝘩𝘸𝘢𝘳𝘵𝘻 (@JoelKatz) April 13, 2021
He went on to say that holders should reevaluate if they have at least half a year’s earnings in crypto and/or “significant debt.” Given the hot state of the crypto market— has risen 850% in the last year and BTC is up 790% to $63,000—that’s probably most long-term holders.
Schwartz has taken his own advice in the past. He admitted in 2019 to having sold $40,000 worth of ETH before the peak of the late-2017 bull run to buy solar panels. In the latest thread, he suggested that he shouldn’t have sold all of it. “I guess I was thinking it would go back down and I’d buy back in,” he tweeted. “But it didn’t. You can regret taking too little risk too, of course.”
When taken alone, Schwartz’s tweets are hardly controversial. When your risky investment into a relatively volatile asset pays off, best to convert some of the profit into something more stable. That’s why retirement mutual funds rebalance every year to increase the percentage of bonds relative to stocks. It locks in earnings.
But the tweets come during the middle of a $1.3 billion SEC lawsuit against Ripple Labs over what the agency views as unregistered securities sales of the payment network’s token. That case hinges on whether XRP is, in fact, an investment contract or merely a virtual currency. (The latter is how the SEC views and ; Ripple is hoping to be treated the same way.)
Ripple just yesterday filed a motion to dismiss the SEC’s suit after the tech firm won three fairly significant decisions. First, the SEC will have to share some documents detailing its discussions of Ripple, BTC, and ETH. Second, Ripple can redact some of its executives’ private email exchanges, thereby limiting what the SEC can use as ammo. And last, the SEC’s request for executives’ personal financial data was denied.
But the case isn’t over yet. Usually, company executives try to maintain a low profile during legal proceedings, lest their words become evidence.
Then again, Schwartz was referring generally to cryptocurrencies, not XRP. And he implied that crypto prices can—and do—go down. Not XRP, though. It’s going up, hitting its highest price this year at $1.81.
Is anyone selling?