In the case of heightened market volatility, Canada-based investment company Cypherpunk Holdings (CSE: HODL) decided to release all bitcoin and ether and convert cash to deal with current market risks, but does not rule out that after the market stabilizes, Invest in cryptocurrencies.
The Canadian Securities Exchange (CSE)-listed company sold 2,058,209 ether for CAD 293,000 ($227,000) and 2,147,203 for CAD 6.09 million ($4.7 million). Bitcoin. Cypherpunk Holdings realized a total of 6.38 million Canadian dollars ($5 million) after selling ether and bitcoin, according to an announcement on Tuesday .
It has 18.16 million Canadian dollars ($14.1 million) in cash and stablecoins on hand, the company said, adding that there is also about 1.93 million Canadian dollars ($1.5 million) allocated to structured products with 30-day redemption notices .
Jeff Gao, president and chief executive of Cypherpunk Holdings, said the decision to sell all of the company’s bitcoin and ether holdings was driven by heightened market volatility that makes holding cryptocurrencies increasingly risky for investors.
Both bitcoin and ether have more than halved in price over the past year, hitting a 52-week low earlier this month, while shares of Cypherpunk Holdings have fallen 50% this year. Jeff Gao said in a statement,
We believe that the most prudent course of action is to sit back and wait for the spread of volatility and illiquidity to come to a logical conclusion. On a balance of probabilities, we see weakness in cryptocurrencies opening the way for lower price levels, as more and more operators impose “temporary” moratoriums on withdrawals.
Jeff Gao pointed out that Cypherpunk Holdings will maintain a “long-term bullish” view on the prospects of cryptocurrencies, waiting for the market to recover before seizing the opportunity to enter the market.
Crypto Winter is Coming
The cryptocurrency market has also plunged into a slump as investors responded to high inflation by dumping risky assets.
For example, an analysis by Arcane Research found that bitcoin mining companies including Riot Blockchain (RIOT) and Bitfarms (BITF) had sold more than 100% of their production in May as the price of bitcoin fell 45%.
As economic headwinds continue to put repayment pressure on crypto lenders and spur mass layoffs in the crypto industry, investors are likely to continue dumping cryptocurrencies and moving funds to what they see as safer, less volatile stores of value , until the market recovers.
Moe Adham, chief investment officer at Cypherpunk Holdings, said the risk to cryptocurrency investors remains “huge” until the market turns around. He says:
The cryptocurrency market remains in a deep risk-off environment, and asset prices across the cryptocurrency industry remain at risk of further sharp declines.