I am really really curious, who are selling the Bitcoins? If you see the price these days, the conventional wisdom is to HODL, but lo and behold, there are sellers. Who are these people? How did they get so many Bitcoins and why are they selling?
Many investors in the space will sell when it’s high, and buy when it’s low. This is a highly speculative investment, and shouldn’t be treated like stocks or other investments.
You hold a diversified portfolio of stocks because companies on average will eventually will grow or pay a dividend.
Crypto though? It could easily crash and never return at any time, and has crashed dramatically multiple times before.
When an investment goes up hundreds of percent in a single year, that raises a lot of red flags amongst many investors about the potential for a crash. This type of gain is just not normal in investing.
I've been watching the prices/news/volume recently on crypto generally - and it seems clear a lot of new people are entering right now with a poor understanding of the environment and that creates opportunity in the alt-coins. Look at something like Ripple which if people were informed about current news should be falling off a cliff but still seems to 3rd in market cap and sometimes having rallies that outperform coins that haven't been more or less labeled by the SEC as fraudulent. Although this seems irrational to me, I think understanding those newbie conceptions opens up opportunities for some bigger gains than on Bitcoin - yesterday I decided to buy something that was certainly the days winner on coinbase that went from 5 cents to around 15 cents overnight (tripled in less than 24 hours) and I wasn't totally surprised - it'll probably slow down a little - but still worth holding on.
The reason there was quick money to be made? Investing in something with a low-market cap relative to the others (also easily available on coinbase) - and maybe also a recognition that new buyers might like coins at certain price points. I looked at that coin and I saw the market cap was 30 million dollars (about $50 million behind the next closest on Coinbase), wasn't a total dud and also looked at the volumes of transactions happening on the market as a whole to see there was action happening anywhere and everywhere. I said to myself, if Bitcoin has a market cap of 600 billion, then to move the price 1% requires an additional 6 billion dollars injected there. If you take 1% of that 6 billion, 60 million and it went into that alt-coin (which is just about what happened) - it's a 200% gain overnight. For that to happen with bitcoin it would require 1.2 trillion dollars going in, not likely. Now will I sit on this alt-coin until retirement age versus a BTC? Nope - but in the short term if you're looking for moonshot consider what it really takes to move BTC price.
The other thing that really drove ETH up recently and maybe I should have bought some then was moving from Proof of Work to Proof of Stake and the rush to fill out the deposit contract. It seemed to just steadily increase from around $300 once people started getting enthusiastic about filling up the Proof of Stake contract getting it around $600. Once it was filled it seemed to kind of stagnate around $500 for a week and then started going bananas again. Part of that goes with the bitcoin rally - seeing a BTC push 40K opens peoples eyes and brings them in - and BTC sometimes outperforms ETH on the day. What I've noticed though when there is a market pullback for crypto, the pull back Bitcoin often seems to exceed that of Ethereum, which holds it's ground more so.
I'd say there are definitely people who believe more in ETH than Bitcoin for informed reasons. Whether they are like me and intend to use it or just think its a good economic bet at 1200 bucks a pop, can't say - but what I said above are definitely things setting ETH apart at this moment.
And any other party interested in selling would be particularly loud in publicly exhorting others to HODL, so the conventional wisdom is inherently suspect.
Unlike companies which have revenue as a marker, the bitcoin price seems very speculative, and if you think others might sell at 40k, you might do the same.
Yeah I'm not surprised about moves like this. 35k+ is when things start to get interesting.
A few years ago I grabbed one at $1,200 and then sold it like 6 months later for around $1,800 because I was like "cool a 50% gain".
If I had held onto it, selling at 35-40k seems reasonable because even after 15% capital gains tax that's enough to live comfortably in the US for an entire year. That's a life changing amount of money.
How many people have the discipline to buy something at $1,000 then watch it increase to $5,000 and not sell if it starts to come back down? Now imagine when it went to $20,000 previously and then back down to $6,000.
There's nothing wrong with cashing out. Can't go broke taking a profit.