Every once in awhile, even the most diehard cryptocurrency enthusiast end up making investment mistakes. A blockchain executive, David Schwartz recently disclosed that he and his wife had sold off a ton of Ether some years back in a move that they haven’t completely gotten over. Serving as the Chief Technology Officer (CTO) of blockchain company Ripple Labs, Schwartz revealed earlier this week that back in 2012, he had sold of 40,000 ETH token in a bid to hedge his cryptocurrency risk. The Ripple executive was having a lively discussion regarding the benefits of derisking in crypto with some of his followers, especially when it is related to a project you have started.
While there were many people who believed that it is malicious to start derisking when you are also pushing the asset, Schwartz elaborated that this was just a case of rationalism. Even though he said that he was all-in where cryptocurrency was concerned, it needed to be acknowledged that the market is extremely volatile and they need to make some moves for protecting themselves. Eventually, a follower asked him whether he had made the decision of derisking from XRP, Ripple’s in-house token, after the company made some banking moves in 2018 and 2019 that didn’t exactly pan out.
In response to the question, Schwartz said that he had made the decision to derisk back in 2012 or so, when he had been talking about cryptocurrency with his wife. She had insisted that they talk about a derisking plan immediately and he said that every Bitcoin that he had sold for a price of $750 or every XRP that he sold for $0.10 had hurt. It is a given that such decisions would be painful in hindsight. Since he sold off his assets, Schwartz saw Ether rise significantly. The massive selloff that he undertook in 2012 cost around $15.4 million for him and his wife, as Ether currently has a market price of $382.
As far as the challenge between banks and Ripple is concerned, the firm doesn’t appear to be somewhat lagging on that front. The primary growth of XRP comes from its adoption and it seems that Ripple Labs is more concerned with forming relationships with banks. Unfortunately, there has been no prominent partnership, which means that they haven’t been able to take the company forward. Last year, Ripple Labs did quite well as they were able to coast off some strategic investments and partnerships to reach a valuation of $10 billion.
However, most of these partnerships were concerned with its on-demand liquidity (ODL) tool, which is referred to as xRapid. The lagging performance of the company’s token has also had an impact on their partnerships. One of the top officials at Santander, a Spanish banking giant, Cedric Manager said in August that they were becoming skeptical of the XRP token because it lacked a solid presence in most major markets. Santander is one of the top banking partners of Ripple Labs and initially, they had tapped XRP for its international payment network called One Pay X.