Summary:
Billionaires are selling Nvidia and investing in Bitcoin.
Spot Bitcoin ETFs have made it easier for institutional investors to enter the crypto market.
Millennium Management invested over $2 billion in Bitcoin ETFs.
Bitcoin is projected to potentially reach $200,000 by the end of next year.
Cathie Wood raised her Bitcoin target to $3.8 million by 2030.
It's always insightful to track the moves of the most astute investors on Wall Street. Recent 13F filings with the SEC reveal a significant trend: a growing number of billionaires are selling Nvidia (NASDAQ: NVDA) and pivoting towards Bitcoin (CRYPTO: BTC).
Billionaires and the Bitcoin ETFs
The shift towards Bitcoin commenced in January with the launch of spot Bitcoin exchange-traded funds (ETFs), providing institutional investors an easy avenue to access the crypto market. The excitement peaked in early 2024, but it was only after the May 13F filings that the scale of investment became apparent.
Millennium Management LLC, led by Israel Englander, made headlines by investing over $2 billion into Bitcoin ETFs, earning him the title of "king of the Bitcoin ETF holders." Other notable investors included Digital Currency Group, Susquehanna International Group, Jane Street Group, and D.E. Shaw. Meanwhile, billionaires like Stanley Druckenmiller, George Soros, Lee Ainslie, and David Tepper were offloading Nvidia shares in the same timeframe.
Bitcoin's Long-Term Growth Potential
The crucial question arises: Why this shift from Nvidia to Bitcoin? Nvidia's stock has soared over the past two years, prompting investors to realize gains and seek new opportunities. Concerns over an "AI bubble" may also be influencing this sentiment.
Bitcoin, trading nearly 15% below its all-time high, presents appealing upside potential. Investment firm Bernstein forecasts Bitcoin could reach $200,000 by the end of next year. With its current price around $63,000, this represents a potential 300% return in a short period.
For long-term investors, the outlook is even more promising. Cathie Wood of Ark Invest has set a $3.8 million target for Bitcoin by 2030, while billionaire Michael Saylor envisions a price of $13 million by 2045.
Bitcoin and Downside-Risk Protection
Beyond its growth potential, Bitcoin is increasingly recognized as a store of value, akin to gold. This quality makes it an attractive asset during times of economic, political, or geopolitical uncertainty. Billionaire Stanley Druckenmiller has likened Bitcoin to gold, highlighting its reliability in turbulent times. Other billionaires like Paul Tudor Jones and Mark Cuban have echoed similar sentiments, underscoring Bitcoin's role as a hedge against downside risk.
Nvidia or Bitcoin?
It's essential to note that the choice between Nvidia or Bitcoin might not be necessary. Both can coexist in a long-term investment portfolio. Interestingly, the correlation between Nvidia and Bitcoin remains high, with a correlation coefficient of 0.80 around the Bitcoin halving in April. This suggests that movements in Nvidia often coincide with Bitcoin's trends.
Should You Invest $1,000 in Bitcoin Right Now?
Before diving into Bitcoin, consider the insights from the Motley Fool Stock Advisor team, which has identified the 10 best stocks for current investment, notably excluding Bitcoin. They emphasize diversification and strategic portfolio management, suggesting that if you're heavily invested in Nvidia, now might be the right time to explore Bitcoin as an alternative.
Image source: Getty Images.
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