Why do small scale Bitcoin holders panic sale?

[kro55]

There are many reasons why people sell bitcoin when the market is dumping, such as newbies lacking knowledge and experience in the market, speculators, people in financial difficulty or people investing with borrowed money...These are common mistakes made by small investors. Meanwhile, funds and organizations have long-term investment strategies and large capital resources, helping them be more proactive in the game than retail investors.

But that doesn't mean funds and institutions will always be the winners in the market. If you take the time to research, you will see that the 2022 bear season also caused a series of bankruptcies of hedge funds like Alameda Research or Three Arrows Capital (3AC). They are also reputable venture capital funds in the market, each owning and managing more than 10 billion USD. The market is much tougher than we think.

[SickDayIn]

Its because they're not used to how quickly the market moves in cryptocurrency. Unlike stock markets which have restricted hours for trading, and rules such as stock trading freezes when the price plummets more than 7% in a specified period, cryptocurrency bas no rules. Downward spirals don't stop and can be sudden and quick. Small holders are typically beginners and aren't used to different transiting conditions.

[reagansimms]

This is the reason why it is highly recommended to use money that is not used for other needs or money from loans to invest. When small investors use money they can afford to lose, the panic you mentioned in Op will never happen. Whatever happens in market conditions it will not be easy for the Pope to change his decision, patience and mental strength are needed when investing in highly volatile assets.

What the whales did should be a lesson for small investors, those who have so many assets still have the desire to accumulate their assets, they should be the first to panic when the price starts to move down, But they remain steadfast because of their great belief in the potential that Bitcoin will bring in the future. This is where the difference between whales and small investors is because of their different levels of understanding. I am not talking about how much capital is owned, but knowledge about investment will determine the direction in the future.

[franky1]

i dont think weak hands are selling at a loss, they are just the weak hands making minimum profit, but end up aiding the majority to have a raised bottom

things to keep in mind
when weak hands bought at $25k last year and then panic sell at $59k even though they had an opportunity to sell at $70k+ just months ago, those weak hands may have made a profit but not as much as they could make if they held on longer or sold recently... but remember this.. those weak hands had a acquisition cost of $25k.. so when selling the coin the new buyer now has a acquisition cost of $59k. this means the current holder of a specific amount of coin no longer would be willing to sell from $25k+ but would refuse to sell below $59k from now on(for that specific allotment of coin)

when bitcoin transfers to new holders it sets a new support barrier "bottom" (value) that they wont sell below and as such creates a raised value level, which along with the rising mining cost of block reward coin cost also enforces a higher minimum sell price.

as time passes and coins pass different holders, less and less people are willing and able to sell below $25k-$50k which means if for instance $55k becomes the MAJORITY minimum sell price, then the only way is up.

..
i personally still have a hoard of coin from the 2012 days of $6, meaning i can sell at any price between $7+ and profit. however i love the fact that the majority of holders are acquiring coin and setting a new raised bottom of over $50k as it means the chances of the price crashing back to $6 is negligible/near impossible unless the majority were to become idiots and sell at a loss, which would only happen if bitcoin had a huge bug/unfixable problem and majority wanted to escape

[davis196]

1.An investor, who is panic selling is not a true HODLer. You can call him whatever you want, just don't call him a holder or a HODLer.
2.Why do investors panic sell? This question is as old as the financial markets. Maybe because the investors are people and people can be emotional, irrational, conformists, insecure, etc. The crypto whales have lots of money. They can survive a price crash or a bear market. Try surviving in a market bloodbath with your life savings(which you can't afford to lose). It's pretty normal to expect that many people, would panic sell and choose safety, instead of HODLing a volatile asset in times of market turbulence.

[Zigabel]

Not having enough in your wallet is a reason to have panic attacks some instances especially when there's high volatility in the market, the fear they could get their portfolio running into minus at high in volatility periods could be one key reason they panic sell so they could still retain some profitability amidst the volatility of the Bitcoin market but with the whales it's totally different reason been that they have got the capital strength and almost no reason to panic at all so they wouldn't have to be selling off at intervals but rather see it as an opportunity to add some more to their portfolio which can be seen as buying low to probably sell higher.

Another reason could be in the purpose for which they are hodling, some hodle for a long term investment while the others are most for short term and this is common with small investors who have their wallet balance in very smaller units, this doesn't mean they aren't hodlers, infact they are one of the reasons for the volatility we witness in the market at some point because they rush in in their numbers and rush out almost immediately too, so reason for hodling and portfolio strength against volatility could be reasons for panic sales.

[KingsDen]

My thought is that, why can't they emulate those whales in holding or accumulating more , is it that they lack the funds to accumulate more, or they don't trust Bitcoin, or they went into the market without any idea of how Bitcoin operates, what do you think could be the reason why shrimps panic sale instead of accumulating like whales?

Many things could cause small bitcoin owners to sell!

• Lack of trust in bitcoin
• Investing with money for house rent or other utilities
• Lack of emergency fund
• Lack of bitcoin knowledge
• Fear, uncertainty and doubt
• Lack of money

It is a natural principle that he that has in abundance will definitely risk the more. He that has a little will try to guard it and not take much risks.

[Rockstarguy]

My thought is that, why can't they emulate those whales in holding or accumulating more , is it that they lack the funds to accumulate more, or they don't trust Bitcoin, or they went into the market without any idea of how Bitcoin operates, what do you think could be the reason why shrimps panic sale instead of accumulating like whales?

Majority of people who have small quantity of bitcoin are not real holders of bitcoin, they don't understand the market and whenever the price of the market drops they begin to panic. The reason why some of this people have this low amount of Bitcoin is not because they can't afford to accumulate bitcoin but they just want have small amount of bitcoin to see if they can make profit from it quick. People who have reasonable amount of Bitcoin for hodling, it is not as if they have so much money to buy bitcoin but they understand how to accumulate bitcoin.

People who have small amount of bitcoins can't emulate the whales because it is impossible to emulate something that you don't believe in but only just trying with a little amount if it work not. It is not as if some of the whales are better financially than those who have small amount of bitcoin just that the whales don't fail to buy bitcoin every opportunity they have.

[icalical]

Most of these small holders are the ones who tend to panic sell since they are the most sensitive to short-term swings in price. Whales have so much more cash on hand to ride out the ups and downs of the market, which means they don't get knocked down as easily by sudden drops, making the little guys sell off in a panic, thinking they will lose it all. Glassnode, for instance, shows in their study that smaller holders normally buy higher and sell on dips, while whales accumulate during downturns and statistically look way more stable.

A lot of new investors just can't understand how Bitcoin can be long-term, how it moves in the market. They see a dip and think it's the end, wanting to cut their losses, while more experienced or wealthier investors realize it's a buying opportunity. So, it's less a matter of trust but rather knowledge and experience.

[Blitzboy]

When the market drops, smaller Bitcoin holders feel nervous. Panicked sales are understandable. They dont have the same deep pockets as the big players, the whales. Those guys can weather the storm and buy more when prices drop. The little guys, not so much. It all comes down to risk tolerance and how much skin you have in the game. When a lot of your investment is in Bitcoin, every price change feels like a rollercoaster. Your emotions take over when you see red. Human nature.

Bitcoin is the future. Not getting rich soon, but being part of something big. Its about supporting a decentralized financial system that empowers people. So, to all the small-scale investors out there, I say this: dont panic. Research, understand the market, and think long-term. Though turbulent, Bitcoin is highly resilient. Its always recovered from setbacks.

[I_Anime]

Those that are panicking and selling are those that have already fixed their mind in less profits ( short-term investors) , because a long-term investors won't sell , especially in a of dip rather he or she will increase their rate of accumulating, inorder to buy the dip putting themselves in a nice position in holding bitcoin. And most of these folks that usually sell in loss always endup regretting their actions of not being patient, while those that kept holding usually endup smiling ( BTC).

While some is that they don't have a good foundational knowledge on how bitcoin works , like alot of folks don't know the real meaning of bitcoin, most of them sees bitcoin as a means to get rich quick, though bitcoin can literally make one financially stable , but it may takes time , but with consistency in their Bitcoin investing one can surely get their.

[passwordnow]

that has got me curious as to why the small scale holders do panic and sale instead of holding whereas those who got more than enough are seriously accumulating more.

You can't blame them. Just because they've got peanuts and the whales have got much, doesn't mean that they have an invalid feelings. There are many reasons why they panic when the market is moving. I've been there and I understand their feelings.

My thought is that, why can't they emulate those whales in holding or accumulating more , is it that they lack the funds to accumulate more, or they don't trust Bitcoin, or they went into the market without any idea of how Bitcoin operates, what do you think could be the reason why shrimps panic sale instead of accumulating like whales?

There is a time for everything and you have to understand that. Whether they have funds or they lack of it, the maturity of ones feelings towards the market like Bitcoin will come. It doesn't mean that they don't trust Bitcoin. As I've said, there is a time that they'd feel that they'll feel trusting Bitcoin and even tons of FUDs comes to the market, they won't be moved.

[Mpamaegbu]

...what do you think could be the reason why shrimps panic sale instead of accumulating like whales?

It's likely not any of the reasons you pointed out. I think it's going to be majorly because shrimps assume accumulating Bitcoin is their sure way of getting rich. Therefore, their investment strategy is often short term. So, whenever the market moves an inch in favour of bull run they hastily sell off; thinking that's a point of price reversal. It's not so with whales who are mostly known for long term investments and are less distracted by what price feeds do on a regular.

[Wakate]

I've come across several Bitcoin news channels and groups talking about whales accumulating more bitcoin and small holders panic selling, the recent one that got me curious is a news from (Crypto Insider) a Cryptocurrency news channels on telegram that's said, in August alone about 283 or more wallets surpassed the 100 $BTC mark.

 It further stated there that in total, over the past 30 days wallets with the balance 10 to 10,000 $BTC have accumulated over 100k $BTC worth about $7.6b and that has got me curious as to why the small scale holders do panic and sale instead of holding whereas those who got more than enough are seriously accumulating more.

 My thought is that, why can't they emulate those whales in holding or accumulating more , is it that they lack the funds to accumulate more, or they don't trust Bitcoin, or they went into the market without any idea of how Bitcoin operates, what do you think could be the reason why shrimps panic sale instead of accumulating like whales?

You don't need to be surprised because everyone of us have different financial limit and that is why we have different level of investors and Bitcoin holders. Just like we have ordinary traders in the crypto market, we also have huge funds traders who are in the market to make profits just like small scale traders having different accounts size and when to take their profits.

You can't expect someone that has $1000 worth of Bitcoin to have the same endurance limit or investing strategy like the other that has over $100 million worth of Bitcoin in their portfolio. The rich are not even interested in selling now even though the price of Bitcoin quickly hit $100k. It is the short term investors that would be panicking sending their holdings so they can maximize the profits without knowing if the price will still increase or not. The patient rate is different depending on how much we are holding.

[Farma]

Those that are panicking and selling are those that have already fixed their mind in less profits ( short-term investors) , because a long-term investors won't sell , especially in a of dip rather he or she will increase their rate of accumulating, inorder to buy the dip putting themselves in a nice position in holding bitcoin. And most of these folks that usually sell in loss always endup regretting their actions of not being patient, while those that kept holding usually endup smiling ( BTC).

While some is that they don't have a good foundational knowledge on how bitcoin works , like alot of folks don't know the real meaning of bitcoin, most of them sees bitcoin as a means to get rich quick, though bitcoin can literally make one financially stable , but it may takes time , but with consistency in their Bitcoin investing one can surely get their.

All of that will depend on the strategy of each investor in setting the investment targets they run and for some people who take advantage in the short term, they have certainly made a profit according to the target they have set, but for those who choose to maintain their assets in the long term and will also continue to collect their assets until they reach the profit target they set, anyone who sells their Bitcoin assets when the price is falling will of course regret it and this happens because they do not understand how Bitcoin works and this will certainly make them lose.

When someone understands that Bitcoin is a means to get rich quick, then they have misunderstood Bitcoin and it would be better for them to re-learn about Bitcoin so that they can make Bitcoin a means of storing their assets in the long term so that they can feel the benefits of holding these assets.

[mirakal]

 My thought is that, why can't they emulate those whales in holding or accumulating more , is it that they lack the funds to accumulate more, or they don't trust Bitcoin, or they went into the market without any idea of how Bitcoin operates, what do you think could be the reason why shrimps panic sale instead of accumulating like whales?

Lack of trust makes them feel nervous when seeing the price drop, and I say it is normal. And why are they not acting like whales? Their behavior is different because what is in their mind is worries and uncertainties, while these whales are aggressive and are willing to spend money despite high risk. Whales find the declining situation as a buying opportunity, while other people consider this a losing journey.

In their views and actions, we can say that they are different and much more with their approaches. That is why whales continue to build wealth, as they are going straight to their goal without a doubt. Believing the fact that high-risk takers earn more, which we find reasonable because whales have already proven it. 

[Raflesia]

I've come across several Bitcoin news channels and groups talking about whales accumulating more bitcoin and small holders panic selling, the recent one that got me curious is a news from (Crypto Insider) a Cryptocurrency news channels on telegram that's said, in August alone about 283 or more wallets surpassed the 100 $BTC mark.

 It further stated there that in total, over the past 30 days wallets with the balance 10 to 10,000 $BTC have accumulated over 100k $BTC worth about $7.6b and that has got me curious as to why the small scale holders do panic and sale instead of holding whereas those who got more than enough are seriously accumulating more.

 My thought is that, why can't they emulate those whales in holding or accumulating more , is it that they lack the funds to accumulate more, or they don't trust Bitcoin, or they went into the market without any idea of how Bitcoin operates, what do you think could be the reason why shrimps panic sale instead of accumulating like whales?

I need to correct one thing here because I personally as a small-scale bitcoin holder don't really like saying that small-scale bitcoin holders always sell panic because in fact not all are true like that.

It is undeniable that there are still even a lot of people selling when panicking but that cannot be said to be small-scale bitcoin holders only because in the end regardless of small or large holders everything is the same where when they do not have much knowledge and experience then they will sell the bitcoin they have in a state of panic because panic is not a benchmark for whether they have small or large assets but panic occurs because they are still not sure what is being done whether it is right or wrong including in bitcoin hodl.

So in this case we cannot classify that small-scale bitcoin holders always sell when panicking and those who become large-scale bitcoin holders do not do that because I think the concept is not from how big you are in bitcoin but how sure you are and how ready you are mentally when doing long-term hodl.

[legendbtc]

 My thought is that, why can't they emulate those whales in holding or accumulating more , is it that they lack the funds to accumulate more, or they don't trust Bitcoin, or they went into the market without any idea of how Bitcoin operates, what do you think could be the reason why shrimps panic sale instead of accumulating like whales?

I see people have pointed out most of the reasons why small scale bitcoin holders sell their bitcoins and I agree with most of what they say. I just want to add, what would happen to the market if everyone, from retail investors to whales, bought bitcoin and didn't sell? I don't think that's good for the markets and that's not how financial markets work. If that happens, the market will soon crash and bitcoin will soon become worthless. Also, if people are just buying and not selling, where are you going to get cheap bitcoins to buy?

We are on a battlefield, meaning there will be winners and losers, you cannot expect that we all win when investing in bitcoin.

[GiftedMAN]

My thought is that, why can't they emulate those whales in holding or accumulating more , is it that they lack the funds to accumulate more, or they don't trust Bitcoin, or they went into the market without any idea of how Bitcoin operates, what do you think could be the reason why shrimps panic sale instead of accumulating like whales?

There are several reasons why small Bitcoin holders panic for sale but I will talk about three major reasons.

1) Lack of adequate knowledge of Bitcoin investment: you will be surprised to know that majority of the people who claim to understand how the Bitcoin investment works only know how to buy and sell Bitcoin, they did not make accurate findings before choosing to invest because they were focused on getting profit since they think Bitcoin can make them become millionaires upon investing so when they aren't getting the desired results, they will start panicking because they want to sell and take the little profit they have made.

2) Investing with borrowed capital: Some investors after being told to invest with the amount they can afford to lose will always choose to borrow money to invest with the idea of paying back as soon as they make profit so when they get a little progress as a result of the increase in the price of Bitcoin, they will be eager to always sell.

3) Fear of losing money: This is the more reason why small scale holders panic more, they invested with the little money they have, some may not have a back up plan so they will be scared of losing money whenever they hear of dip, this case is the reason why investors are advised to always have a back up plan instead of depending totally on their investment.

[pawanjain]

I've come across several Bitcoin news channels and groups talking about whales accumulating more bitcoin and small holders panic selling, the recent one that got me curious is a news from (Crypto Insider) a Cryptocurrency news channels on telegram that's said, in August alone about 283 or more wallets surpassed the 100 $BTC mark.

 It further stated there that in total, over the past 30 days wallets with the balance 10 to 10,000 $BTC have accumulated over 100k $BTC worth about $7.6b and that has got me curious as to why the small scale holders do panic and sale instead of holding whereas those who got more than enough are seriously accumulating more.

 My thought is that, why can't they emulate those whales in holding or accumulating more , is it that they lack the funds to accumulate more, or they don't trust Bitcoin, or they went into the market without any idea of how Bitcoin operates, what do you think could be the reason why shrimps panic sale instead of accumulating like whales?

Small holders are usually the ones who need quick profits to grow their portfolio size. Not everyone but many of them are like this.
So when the market dumps then the small holders get a panic attack since their portfolio keeps decreasing in $ value.
Hence they decide to sell when the market dumps. This might be a good strategy for some of them to keep a stop loss and then buy back later.
But some people lose their money by not buying it back in the dips and instead buying when the market recovers crossing their previously bought price.