Investment firm Cypherpunk liquidates its Bitcoin and Ethereum holdings
CEO says most prudent approach is to sit on the sidelines amid volatility and illiquidity
Cypherpunk Holdings saw its stock slip on Wednesday, after the investment firm announced that it had dumped all of its Bitcoin and Ethereum treasury holdings.
The Canadian company announced it had sold 214.7203 Bitcoin for around CAD6.09m ($4.7m), 205.8209 Ethereum for CAD293,000. In total, Cypherpunk made CAD6.38m ($5m) from the sale.
It said that it has CAD18.16m of cash and stablecoins on hand and CAD1.93m allocated to structured products with 30 days redemption notice.
Chief investment officer (CIO) Moe Adham stated: “Crypto markets remain in a deep risk off environment. There remains risk of further significant drawdowns in asset prices across the crypto sector.”
He added: “In the interest of all shareholders, the company transitioned its treasury to cash. This transition prepares our business to take advantage of investment opportunities we believe will become available after a substantial recapitalization of certain projects."
Bitcoin and Ethereum have fallen by 58% and 70% respectively since the start of the year. Before the onset of the ‘Crypto Winter’, a number of companies added these leading cryptocurrencies to their treasuries.
While the most prominent such firm, MicroStrategy, has vowed not to sell any of its Bitcoin holdings despite its stock price falling by 66% in the year to date, other firms have been less resolute.
Cypherpunk’s stock traded down 11% at CAD0.080 by 11:15 EST, 55% lower than the level at which it started the year.
CEO remains bullish
CEO and president Jeff Gao said that the company continued “to see systemic risks propagating throughout the crypto ecosystem”, adding: “The most prudent approach is to sit on the sidelines as we wait for the volatility and illiquidity contagion to come to its logical conclusion.”
Gao further stated: “Cypherpunk maintains its long-term bullish outlook on crypto and currently plans to actively seek to capitalize on compelling risk reward opportunities as and when they present.”