Crypto enthusiast and prominent figure in the industry, Sommi (@yourfriendSOMMI), recently made a compelling case for the advantages of holding XRP instead of actively trading the cryptocurrency. His argument, backed by a $100,000 investment, sheds light on the enduring benefits of long-term ownership in the face of the inherent volatility of trading.
In a post on X, Sommi revealed that he tried a trading indicator used by many investors in the crypto market to outperform investors who hold tokens instead of trading them.
However, he emphasized that this approach only pays off if one can accurately predict which altcoins will flourish in the future. He described the ability to make these predictions as a separate skill that depends on luck and gambling.
Sommi supported his argument with an example of an initial $100,000 investment in XRP in late 2018. The amount later surged to an impressive $170,000. This remarkable 70% increase proves how effective his strategy of holding XRP is. Sommi added that any active trader using the indicator he mentioned before would have suffered a 76% loss, leaving them with $24,000 within the same timeframe.
The Community’s Reaction
DRIP to Wealth (@DripToWealth) pointed out that everyone in the cryptocurrency believes strongly in their preferred cryptocurrency. According to him, most people believe they are holding the right cryptocurrency that could give them the best results, and he states, “Let’s see who’s right!!”
Sommi agreed that DRIP to Wealth made a great point because most people expect their altcoins to go up 100x. However, he pointed out that most tokens would only go up 5x to 15x and then go on a round trip. DRIP to Wealth added that most people wouldn’t take their profits with a 5x to 15x increase but wait for a 100x surge. He asked, “When did a 5x-15x stop becoming good money?”
Another user pointed out that most traders split up their investments. They hold on to a certain amount and trade with the rest. This way, they continually reinvest part of their trades and can use the rest as “pocket money.” This analysis certainly makes a strong case for HODLing instead of daily trading.
Meanwhile, Ripple CTO David Schwartz recently disclosed that his father bought over 1 million XRP at half a penny per token. However, it is important to remember that individuals should only employ trading strategies they feel comfortable with because some people have made huge profits trading daily. Don’t take this as investment advice. Do your own research (DYOR).
*Disclaimer:
This content aims to enrich readers with information. Always conduct independent research and use discretionary funds before investing. All buying, selling, and crypto asset investment activities are the responsibility of the reader.