Ross Gerber, an investment advisor, co-founder & CEO of GK ETF, tweeted his mind on all things crypto and crypto exchange platform Coinbase Global (COIN). He cautioned investors that they must undergo thorough due diligence before parking money in crypto firms like Coinbase.
Cryptocurrencies are flirting with their bottoms lately. Several investors do not even have complete knowledge of the assets they invest in, making them doubly anxious about witnessing such lows. COIN stock has lost over 33% since it posted weak Q1 results due to its heavy exposure to bitcoins (BTC-USD).
Gerber quoted “No one should be surprised that the crypto they keep at exchanges like Coinbase are not “safe” or insured like a FDIC/SIPC firm like mine.”
The Federal Deposit Insurance Corporation (FDIC) and the Securities Investor Protection Corporation (SIPC) typically cover “x” amount of investor’s losses should the banks or financial institutions go bankrupt.
Gerber noted that there is no protective shield for investing in crypto exchanges nor marketplaces like OpenSea which provide a platform for non-fungible tokens (NFTs) and other crypto collectibles.
Ironically, Gerber’s tweet was flooded with replies reminding him of the time back in 2021 when he was bullish on COIN and for also adding the stock to the GK fund.
Many even sided with him and suggested that holding money in hardware wallets like Ledger and Trezor was a much safer way to invest in digital currency.
His tweet has also angst many people thinking that Gerber is suggesting that Coinbase is going bankrupt soon!
Nonetheless, believers in the crypto world remain enthusiastic about the assets and continue to bestow their trust in them. The key takeaway as rightly said by Gerber is to do proper due diligence before investing in anything.