Selling Bitcoin Doesn’t Mean You’re Not Bullish: Cypherpunk CEO

Despite a massive wave of liquidations in the cryptocurrency market, some companies that have sold their crypto over the past few months are not bearish on Bitcoin (BTC) at all.

Canada-based investment firm Cypherpunk Holdings was one of the companies that chose to sell crypto in the middle of the 2022 crypto winter, liquidating 100% of Bitcoin and Ether (ETH) by June. One of the first public companies in the world to ever invest in Bitcoin, Cypherpunk said at the time that it maintained its long-term “bullish view on crypto” despite selling all of its digital coins.

One might find Cypherpunk’s crypto liquidation somewhat odd as the company’s stock is publicly traded under the ticker symbol HODL on the Toronto Stock Exchange. The acronym is widely used in the crypto community to refer to “Hold On for Dear Life”, or the bullish strategy of holding on to Bitcoin regardless of market conditions.

According to Cypherpunk CEO Jeffrey Gao, crypto investors can still be positive despite cashing out crypto from time to time.

“We are in this business because we are net positive on crypto for the long term,” Gao said in an interview with Cointelegraph. Cypherpunk could go back to Bitcoin or into “any crypto or any basket of cryptos” tomorrow if they want, and those are “absolutely opportunities” that the firm is actively pursuing, the CEO noted.

Gao said the industry has seen forced liquidations where even “supposedly the most sophisticated” institutions like Voyager, Three Arrows Capital and Celsius became involved in operations that were “completely devoid of risk management.” According to the CEO, the absence or near absence of risk management is what really separates the crypto industry from something more mature. Gao added:

“Going forward, that mentality towards risk management, while still being bullish on the long term, is very important. […] You can be bullish on crypto, but you can still sell yourself out of the market.”

According to Gao, Cypherpunk started the liquidation process in early May, just before the Terra (LUNA) – now renamed Terra Classic (LUNC) – network collapse, with the algorithmic stablecoin TerraUSD (formerly UST) losing its US dollar peg on May 10. “When that happened, we probably offloaded about 30% or 40% of the risk,” Gao said, adding that Cypherpunk then sold another portion when BTC briefly traded above $30,000 in late May. “The last third we probably got rid of was sometime in June,” Gao noted.

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“We basically made no progress, but we also avoided much of the destruction of the capital,” Gao said. He went on to say that he is very optimistic about altcoins like Ether and Solana (SOL), despite some issues with the Solana ecosystem issues in early August.

“Longer term, at least at this point, I would be more bullish on Bitcoin conservatively than the other tokens. But over the next two or three months, I’m probably more partial to Ethereum and Solana,” the CEO noted.