Despite a huge wave of liquidations in the cryptocurrency market, some companies that sold their cryptocurrencies in the last few months are not bitcoin (BTC) at all.
Canadian-based investment firm Cypherpunk Holdings is one of the firms that chose to sell cryptocurrency amid the crypto winter of 2022, liquidating 100% of its bitcoin and ether (ETH) in June. One of the first listed companies in the world to invest in bitcoin, Cypherpunk said at the time that it maintained its “long-term bullish view on cryptocurrency” despite selling all of its digital coins.
Liquidation of cryptocurrency Cypherpunk can look strange, as the company’s shares trade under the symbol HODL on the Toronto Stock Exchange. The acronym is widely used in the cryptocurrency community to refer to the phrase “Hold On for Dear Life,” or the bullish strategy of holding bitcoin regardless of market circumstances.
According to Cypherpunk CEO Jeffrey Gao, cryptocurrency investors can remain bullish even if they cash out their cryptocurrencies every once in a while.
“We are in this momentum because we are clearly supporting cryptocurrency for the long term,” Gao said in an interview with Cointelegraph. Cypherpunk can get back into bitcoin or “any cryptocurrency or indeed any basket of cryptocurrencies” tomorrow if they want, and those are “definite opportunities” the company is actively pursuing, the CEO noted.
Gao said the sector has seen forced liquidations because even the “most sophisticated” institutions such as Voyager, Three Arrows Capital and Celsius have gone into operations “completely without any risk management”. According to the CEO, it is the lack or almost absence of risk management that separates the cryptocurrency industry from something more mature in reality. Gao added:
“Going forward, this attitude towards managing risk and staying bullish in the long term is extremely important. […] You can be bullish on cryptocurrency, but you can always sell out of the market. »
According to Gao, Cypherpunk started the liquidation process in early May, just before the collapse of the Terra (LUNA) network — now renamed Terra Classic (LUC) — and the algorithmic stable TerraUSD (formerly UST) losing its currency . dollar on May 10. “By the time this happened, we unloaded about 30 or 40 percent of the risk,” Gao said, adding that Cypherpunk then sold another portion when BTC briefly traded above $30,000 at the end of May. “We probably got rid of the last third that happened in June,” said Gao.
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“Basically we have made no progress, but we have also avoided a lot of capital destruction,” Gao said. He went on to say that he is very supportive of altcoins like Ether and Solana (SOL), despite some trouble with Solana’s ecosystem issues in early August.
“Long term, at least at this point, I would be more conservative on bitcoin than these other tokens. But over the next two to three months, I will probably support Ethereum and Solana more,” the CEO noted.