Why do small scale Bitcoin holders panic sale?

[Marvell1]

Recently it's the whales that are dumping. When we were above $60k it was small investors, but below 58k it's mostly hedge funds who held money with ETFs.

Are they dumping or taking profits? Because if any whales bought bitcoin in the early days of ETFs approval, they are still making a profit. If I remember correctly, the bitcoin price in the early days of ETFs approval was below $45k and is still above $54k today.

Also, if we compare the inflows and outflows of ETFs, the selling volume is much smaller than the buying volume. That's why I don't think they are dumping and cutting losses.
I am not saying that whales will always be profitable and never lose but as big investors they will definitely have better strategies than small investors.

[FinneysTrueVision]

Overreacting to negative news or price trends is normal and can affect anybody, not just smaller scale holders. Whales tend to have more experience and have been through enough cycles to know that when the market is red, it will be a great time to accumulate.

For smaller holders, when you’ve invested a considerable amount of money into something, it might make you scared that you will lose it all if you don’t get out quick enough. It has happened to me several times with altcoin investments, and a majority of the time it was better to dump them than to wait for them to recover. Bitcoin is different from shitcoins, but people will still apply the same logic if they have not been holding BTC for very long.

[retreat]

That is the mentality of most retail investors, they buy high and sell low, because from the beginning they invested in Bitcoin to be able to get quick money by joining in scooping up when the Bitcoin price was high, but unfortunately the Bitcoin price fell and their mentality was not there to hold. If only they had a good mentality and understood Bitcoin investment, then they would think twice about selling at a time like now.

[Troytech]

For smaller holders, when you’ve invested a considerable amount of money into something, it might make you scared that you will lose it all if you don’t get out quick enough. It has happened to me several times with altcoin investments, and a majority of the time it was better to dump them than to wait for them to recover. Bitcoin is different from shitcoins, but people will still apply the same logic if they have not been holding BTC for very long.

It happened to you in altcoins because altcoins are not a safe investment. Bitcoin is certainly to stay for a long period which means you dont have to fear that the price will dump completely to nothing but in altcoins it is dangerous because you dont trust the project to last long even if they look promising at the very beginning or when you invested your money.

Small-scale holders should rather find a way to grow the value of their portfolio and there are only three ways to do that. It's either to keep buying more bitcoin, partake in short-term trading, or leave it for long. When you evaluate these things properly you will understand that the only less risky way of growing the value of their portfolio is when they keep investing with the little they have. If they trade they may end up losing their money, if they leave the small portions like that it will gain value but in a very long time. At the end of the day it is left for the investor to choose whatsoever method he wants to go with his investment, I have only pointed out possible scenarios and one that is less risky because such investors are scared of losing their funds.

[Republikcoin.com]

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?

They understand the journey of bitcoin better and accumulating is an ongoing effort for the stages they have created. Whales have a consideration in terms of holding and they have large capital to make purchases according to what they want. While people who are involved in panic because they don't understand the journey of bitcoin and may be influenced by the capital used for investment to meet their living needs. That's why investing in bitcoin must have a long-term plan regarding the percentage of finances needed. At least for investment capital not to be mixed with daily necessities and if they don't have a mature plan, a price drop will make them panic.

[Ultegra134]

Overreacting to negative news or price trends is normal and can affect anybody, not just smaller scale holders. Whales tend to have more experience and have been through enough cycles to know that when the market is red, it will be a great time to accumulate.

For smaller holders, when you’ve invested a considerable amount of money into something, it might make you scared that you will lose it all if you don’t get out quick enough. It has happened to me several times with altcoin investments, and a majority of the time it was better to dump them than to wait for them to recover. Bitcoin is different from shitcoins, but people will still apply the same logic if they have not been holding BTC for very long.

Although I agree, it's not only the experience that matters. I'd also like to add into perspective the financial situation of said whales. The average investor who purchases through DCA or any other method every week cannot afford to see his investment dump in the timeframe of a few hours or days; it's devastating. Whales, on the other hand, may hold millions or even billions in assets; a loss is still a loss regardless of the amount, but they aren't going bankrupt because Bitcoin dumped 10%.

With that being said, it's perfectly understandable why someone who has worked hard to accumulate some Bitcoin will panic in major market downturns. I'm personally not bothered at all, but not everyone reacts the same way.

[Blitzboy]

For smaller holders, when you’ve invested a considerable amount of money into something, it might make you scared that you will lose it all if you don’t get out quick enough. It has happened to me several times with altcoin investments, and a majority of the time it was better to dump them than to wait for them to recover. Bitcoin is different from shitcoins, but people will still apply the same logic if they have not been holding BTC for very long.

It happened to you in altcoins because altcoins are not a safe investment. Bitcoin is certainly to stay for a long period which means you dont have to fear that the price will dump completely to nothing but in altcoins it is dangerous because you dont trust the project to last long even if they look promising at the very beginning or when you invested your money.

Small-scale holders should rather find a way to grow the value of their portfolio and there are only three ways to do that. It's either to keep buying more bitcoin, partake in short-term trading, or leave it for long. When you evaluate these things properly you will understand that the only less risky way of growing the value of their portfolio is when they keep investing with the little they have. If they trade they may end up losing their money, if they leave the small portions like that it will gain value but in a very long time. At the end of the day it is left for the investor to choose whatsoever method he wants to go with his investment, I have only pointed out possible scenarios and one that is less risky because such investors are scared of losing their funds.

About Bitcoin, you are exactly correct. That's the actual gold standard for cryptocurrencies. Regarding your hard-earned income, you want it in something that will last. Bitcoin has that kind of lasting power. Everybody wants to turn around quickly and make money. But some turn to altcoins for fast riches? They more resemble a rollercoaster than a good financial plan. More likely you will lose your shirt; you might be lucky and strike the jackpot

Folks, slow and consistent wins the race. I so find the concept of progressively increasing your Bitcoin ownership appealing. Though far better than a savings plan. You are investing in the future of money, not merely stuffing cash beneath your mattress. And it goes beyond just money as well. It is related to mental peace. That is invaluable knowing your investments are safe and secure.

[darkangel11]

Recently it's the whales that are dumping. When we were above $60k it was small investors, but below 58k it's mostly hedge funds who held money with ETFs.

Are they dumping or taking profits? Because if any whales bought bitcoin in the early days of ETFs approval, they are still making a profit. If I remember correctly, the bitcoin price in the early days of ETFs approval was below $45k and is still above $54k today.

Also, if we compare the inflows and outflows of ETFs, the selling volume is much smaller than the buying volume. That's why I don't think they are dumping and cutting losses.
I am not saying that whales will always be profitable and never lose but as big investors they will definitely have better strategies than small investors.

In the last few days inflows were 0 and outflows were 50-100 million a day per ETF. If I'm not wrong, only BlackRock did not sell, but I don't trust them since they're owned by a bank.
If they bought in the early days and wanted to take profit, wouldn't that be over $60k? We were between 60 and 70 for months so that's plenty of time to really take profit. When you go back near the level you've bought at after a 30% drop in price and you sell at what looks like a possible short-term bottom, I call that dumping, even if they technically are in profit by a few percent.

[Z-tight]

That is invaluable knowing your investments are safe and secure.

Your BTC is only safe and secure if you have it in your self custodial wallet and if you know what you are doing, some bitcoiners hold their BTC in centralized exchanges and some that use self custodial wallets hold their coins in online devices. Your BTC is only as safe as the device you store it in, and for it to be truly safe, it should be stored in a cold storage wallet, which is either a hardware wallet or an airgapped wallet, in addition with good opsec.

[dunfida]

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 think the main reason why small-scale Bitcoin holders panic sell is due to a combination of factors. First off, most smaller holders simply don’t have the same financial cushion that whales do. When the price dips, they’re more likely to sell because they can’t afford to take big losses. Meanwhile, whales are playing a long-term game. They see those dips as opportunities to buy more because they have the liquidity to hold through the tough times.

Another big reason is psychology. Smaller investors tend to get spooked by volatility and fear that they’re going to lose everything. This is especially true for people who are newer to the market and haven’t seen Bitcoin recover from crashes before. Whales, on the other hand, have the experience and often have access to better market insights, so they’re less emotional and more strategic in their moves.

Also, smaller investors often go into Bitcoin with a short-term mindset, hoping to make quick profits. When the market moves against them, they panic and sell, trying to avoid further losses. Whales don’t think like that—they’re holding for the long term and using the dips as buying opportunities.

In the end, it comes down to experience, financial security, and understanding the market. Whales have the upper hand in all those areas, so they accumulate while the small guys panic.

If you are someone who do have that limited budget or investment fund then you would really be mainly thinking on how you would really be that making something to it as much worth as possible and on the moment that market will really be having that kind of opposing direction on which it causing up for your portfolio on going reds then it cant be avoided that you would really be having that kind of impulsive reaction on which it will really be that mainly affects your investment. Further actions will really be determined on how good you are on handling out such stress and emotions on which it could be potentially be resulting into that sudden making of those decisions which might cause up with that panic selling. If you are someone whose really that new into this market then most likely you would really be that doing that most common action that most people do on which is to panic sell.

On the moment or time that they will really be doing such act then after the market do make out some recovery then this is the time or moment that they would really be having such regret.
This is always the case on which people do learn into their past mistakes and this what makes us even more better. The cycle continues as there would really be newbies who
would really be that entering into this volatile space and later on they do become that experienced but of course this is something which is a common mistake that we are really that able to experience on.

[HelliumZ]

Small amount investors are the most likely to panic sell in panic markets because they are not mentally prepared to take risks. In a panic market they feel that the market may go down further so they face a situation where they have to face huge losses due to which they panic sell in a panic market. Again, those who are huge bitcoin investors are basically ready to take any kind of risk after investing in bitcoin, so no matter how big the panic market comes, they don't get upset and patiently overcome the panic market.

[BABY SHOES]

That is the mentality of most retail investors, they buy high and sell low, because from the beginning they invested in Bitcoin to be able to get quick money by joining in scooping up when the Bitcoin price was high, but unfortunately the Bitcoin price fell and their mentality was not there to hold. If only they had a good mentality and understood Bitcoin investment, then they would think twice about selling at a time like now.

Because their investment preparation does not have a mentality, so when the price of bitcoin plummets they will panic rather than a continuous loss so it is better to sell at a loss no matter what the loss is as long as their money is saved... This is common that investors do not have strong experience so they do not know how the bitcoin cycle is now after passing the halving and they will even rule out the next bullrun.

I know investors who have experience they will not panic, precisely when the price drops they will buy more and continue to accumulate because it is the best opportunity to have more bitcoin... Whereas small investors will think fear of loss in the event of a price drop... If they don't sell, they won't lose.

[Raflesia]

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

Well, most of them do sell at a loss, especially if they have bought just recently and the market starts going down. Most of such investors are the ones who have heard very much of Bitcoin and cryptocurrencies and they have the image in their mind that Bitcoin and cryptocurrencies are all about profit and nothing else, so as soon as they see their investments losing value, they lose their mind, and out of those emotions, they panic sell their assets at a loss.

But if the context is like this then I don't think this is too suitable when we only classify it to small investors because after all we must be aware regardless of small or large, everything is the same when talking about selling when panicking then indirectly they do not have the calmness and readiness to invest because they only think that the benefits are owned in bitcoin even though not everything is like that because we need to think about the worst possibilities that happen later.

Indirectly this is dominated by those who have just experienced being under great pressure in bitcoin for the first time because they have just stepped on themselves in bitcoin and no matter whether they are small or large investors, everything can be the same when they panic and sell even though they lose because of their inability to control their emotions and think that this will harm them.

Therefore, I do not really agree if you say those who panic sell when it is in decline are only categorized as small investors because this can also happen to them large investors.

[Distinctin]

The desire to sell is not only a thing with small scale investor but for people of different income levels. Few weeks ago, we saw how the German government dumped their Bitcoin in the market, amount running into millions which cannot be regarded as small scale investors. On the hand, there are still small investors that are holding and evening accumulating more. So selling and holding is an individual thing and depends on personal goals and targets.

You have a point. I guess it's not how big or small investor you are, but going into panic selling is not actually  surprising most especially with a highly volatile and speculative market. However, those investors who are born patient have high advantage as they won't resort into being too emotional when the market behaves negatively, but for those who are only here for quick profits and just want to hold for short term, then selling would be their best option right before they'll lose their profits.

[RockBell]

That is the mentality of most retail investors, they buy high and sell low, because from the beginning they invested in Bitcoin to be able to get quick money by joining in scooping up when the Bitcoin price was high, but unfortunately the Bitcoin price fell and their mentality was not there to hold. If only they had a good mentality and understood Bitcoin investment, then they would think twice about selling at a time like now.

Everyone intends to make quick money but when you get a better understanding of Bitcoin then you should not have a problem with making quick money from it. You can not think whether to hope for a quick one since the knowledge is already there, because I know how things can be we just need to have the patience to understand how the market works. and a lot of people are always doing that why would you buy high and sell low just because you have lost hope in the market and it is always for the main time, what will now be the purpose of investing and you are not making money, imagine buying at the rate of 60k and you are selling at the rate of 54k, it would have been better for you to spend the money than just waste it on the market.

And the unstable nature of Bitcoin should not make you hurry to sell you won't make anything tangle from it and that is one of the reasons they will always tell you that it is a long-term investment, if I should see anyone like that I will encourage them to learn to have patience. and also preparing ourselves is very important so that we don't go down the same hole. and that is one of the reasons you don't need to go too hasty when you want to invest in Bitcoin there is just too much for us to actually learn very important, it is only when you don't take your time that you fail to be able to mange your investment.

[Republikcoin.com]

You have a point. I guess it's not how big or small investor you are, but going into panic selling is not actually  surprising most especially with a highly volatile and speculative market. However, those investors who are born patient have high advantage as they won't resort into being too emotional when the market behaves negatively, but for those who are only here for quick profits and just want to hold for short term, then selling would be their best option right before they'll lose their profits.

Patience will be formed when someone understands the investment journey that they are running and most people who panic because of excessive fear will make a loss in investment. Panic will make them more emotional in making decisions so they need knowledge to minimize it. Big investors have often experienced market pressure like this so they are more relaxed in dealing with it because of the experience they have. If people understand bitcoin, maybe the decisions taken when the market experiences downward pressure will be much more appropriate because they usually understand the journey of bitcoin well.

[BlackHatCoiner]

Here are a few reasons:

• Because they don't see the big picture.
• Because of the former, they are into Bitcoin solely for the profit.
• Because they're short-termers, who wish to go back with more fiat.
• Because they're "trading".

[$weetne$$]

Lets just say whales are in this for the long-term and will not be shaken by market dips that affect price..instead when price drops they simply buy more of the discounted coins unlike small scale hodlers who will panic if price goes against them especially if say they sold their car or house just to jump on the trending technological investment of the day...in short small scale hodlers want fast profits while protecting their capital and its really understandable if you know what's on the line!

Yes very true because retail Investors use money that they need for investing but whales use money that they do not need for investing therefore, whales have the privilege to keep hodling but small investors will be panicking when they see the market falling. Most whales pray for the market to fall more but you can not see a small scale investor praying for that instead they want the market to continue to rise. Whales know that for them to make money, they have to buy more Bitcoin and the best time to do that is when the market is falling but small scale investors are always afraid. If we want to benefit from bitcoin, we need to think like whales and be buying Bitcoin instead of being scared that the market is falling. Thinking like whales means we should have a source of income that gives us capital to use for investing.

[Marvell1]

Are they dumping or taking profits? Because if any whales bought bitcoin in the early days of ETFs approval, they are still making a profit. If I remember correctly, the bitcoin price in the early days of ETFs approval was below $45k and is still above $54k today.

Also, if we compare the inflows and outflows of ETFs, the selling volume is much smaller than the buying volume. That's why I don't think they are dumping and cutting losses.
I am not saying that whales will always be profitable and never lose but as big investors they will definitely have better strategies than small investors.

In the last few days inflows were 0 and outflows were 50-100 million a day per ETF. If I'm not wrong, only BlackRock did not sell, but I don't trust them since they're owned by a bank.
If they bought in the early days and wanted to take profit, wouldn't that be over $60k? We were between 60 and 70 for months so that's plenty of time to really take profit. When you go back near the level you've bought at after a 30% drop in price and you sell at what looks like a possible short-term bottom, I call that dumping, even if they technically are in profit by a few percent.

If you regularly track the inflows of bitcoin ETFs since they were approved and traded, you will see that the outflows are not even significant. But you are right to wonder why they didn't take profits when bitcoin hit $70k and are taking profits now. But they like us, cannot predict the future, no one knows what will happen to bitcoin tomorrow. Moreover, they invest with capital up to millions, hundreds of millions of dollars, so getting a profit of 5-10% is also a huge profit, and taking profit is never wrong. They are not like us who invest just a few dollars or a few hundred thousand dollars and think that 5-10% return is insignificant.

Also, as you can see, Grayscale is selling bitcoin and ETH every day, they don't seem to care about the price of bitcoin. Simply because they invested in bitcoin and ETH years ago and the price of bitcoin was much lower then than it is now.

From the chart, we can see that the amount of bitcoin held by ETFs is increasing over time.


https://farside.co.uk/btc/

[Alpha Marine]

First, why are you putting a dollar sign in "BTC"? It's like putting a dollar sign on a pound sign. When you say "100 BTC" I don't see a need to add the dollar sign behind it because that could mean a whole different thing.  If you're saying $100 in BTC is a different thing.
That's by the way.

Whales have more money, more income and more capital, so it's easier for them to hold compared to people who don't earn much. Before a person can have 100BTC in his wallet which is worth over $5.6 million currently, the person is already a millionaire and has other assets and investments and a lot of money to take care of himself with, the same cannot be said about a person who has a thousand dollars in bitcoin. He earns a relatively lower income and every dollar matters more to a person like that.