Should You Sell Your Cryptos?

Financial markets have recently been hit by news of billionaires liquidating large positions in high-end stocks. These actions raise the question: Should average investors follow suit, especially when it comes to their cryptocurrencies?

Mark Zuckerberg's dumping of $428 million worth of Meta shares and Warren Buffett's shorting of Apple shares, along with Jeff Bezos' massive sale of Amazon shares, are prime examples of this trend.

Billionaires sell tech stocks

In the year Since the November 2021 shutdown, Zuckerberg has cashed in on Meta's impressive 194% rise in the past year. He sold about 1.28 million shares and pocketed nearly half a billion dollars. Despite this, he holds a 13% stake in the company, demonstrating a unique approach to portfolio management rather than retreating wholesale from his interests.

Similarly, Buffett's Berkshire Hathaway held Apple holdings at 1 percent. While this move is small, Buffett is notable for his reputation for long-term investments. The decision comes as Apple is a cornerstone of Berkshire's portfolio, highlighting the strategic adjustments that even the most stalwart investors make in response to market volatility.

Bezos' divestment of Amazon shares, worth nearly $8.5 billion, further illustrates the trend of billionaires cashing in on the strong performance of tech stocks. This series of transactions seems to speak more to personal financial strategies and tax considerations than to a lack of faith in the technology's grandiose promises.

Read more: Crypto vs. Stocks: Where to invest your money in 2024

However, it's worth noting that tech giants like Elon Musk, Jeff Bezos and Mark Zuckerberg sold more than $42.9 billion worth of stock in mid-December 2021, leading to a significant drop in the market.

As a result, these strategic sales by high-level investors have created speculation and fear among small investors. In the cryptocurrency industry, market participants are concerned with traditional equity sentiment and exposure to market movements.

Is It Time To Sell Crypto?

While recent moves by Zuckerberg, Buffett, and Bezos reflect realignment of portfolios in response to broader market conditions, these may not necessarily help the decline in the tech sector or cryptocurrency markets. Instead, these activities may emphasize the importance of strategic portfolio management.

Cryptocurrency investors, in this context, should not be too quick to jump on the bandwagon based on the actions of a few high-profile figures. The principles of deep research, diversified investments, and long-term perspectives remain paramount in exploring crypto. Market volatility in cryptos is influenced by many factors that influence traditional stocks. These include regulatory developments, technological advances and changing investor sentiment.

Another important factor that has the potential to influence the market is the upcoming Bitcoin halving. Bitcoin's historical pattern since its inception in 2009 shows a consistently impressive trend. In fact, every stripping event is typically preceded by a sharp drop in prices.

For example, in 2012, Bitcoin's price dropped by 50.78% just months before its halving. This pattern repeated itself in 2016 and 2020, with Bitcoin experiencing pre-half declines of 40.37% and 63.09% respectively.

Now, respected analyst Michael van de Pop expects a price correction before Bitcoin's further growth begins.

“My primary position on Bitcoin remains. Looking for a quick correction to $48,000 to $49,000 and then to $54,000 or $58,000 for a final push and a broader correction. This correction is more likely to divert money from Bitcoin to altcoins,” Van de Pop explained.

Read more: Bitcoin price prediction for 2024/2025/2030

Still, the key takeaway for crypto investors is to focus on the fundamentals of investing and maintain a strategy that aligns with their risk tolerance and investment goals. While the investment activity of billionaires can provide valuable market insights, it should not be the sole basis for investment decisions, especially in a volatile market like cryptocurrency.