These days, it may seem that everyone has an opinion about major cryptocurrencies such as Bitcoin, (Crypto: Bitcoin) Solana, (encryption:sol) and Ethereum (Crypto: ETH). But, as with much commentary on markets and investing in general, there is a lot of noise worth ignoring, and precious few nuggets of actionable insight.
Especially if you are not directly involved in the cryptocurrency sector, it can be very difficult to orient yourself properly and keep your focus on the factors that actually matter. So let’s take a look at three types of chatter that are worth ignoring rather than treating as part of your investing process.
It is reasonable for people to take notice when a major global player, such as a government, decides to divest its cryptocurrency holdings. These players often control huge amounts of assets, and selling these assets all at once would obviously have a detrimental impact on the market value of the currencies associated with them.
Take, for example, Germany’s decision to sell $3 billion worth of Bitcoin it acquired through asset seizures in June 2024. Aside from being the talk of the town hall about cryptocurrencies for at least a few weeks, it may also have set off a serious debate. A significant impact on cryptocurrency prices, at least for a while. The prospective sale by the US government of approximately $6.4 billion worth of Bitcoin that could happen this year could easily have a similar or even greater adverse impact.
Sales via Whales In other cryptocurrencies like Ethereum, they are rarely on the same scale as those held by governments, but they still make headlines. Individual large holders who sold as little as $33 million in mid-January of this year are attracting interest, even if the price impact is not as significant as with Bitcoin.
However, these discussions are not worth pursuing. In the long run, it doesn’t really matter which players sell or when. Hence, as an investor, keep your attention on the longer perspective rather than focusing on what some top investors are said to be doing.
The distributed nature of blockchain networks as realized in Bitcoin, Ethereum, and Solana is such that if network validators disagree about some fundamental feature of their protocols, they can. Chain fork And start a new project.
Such forks have occurred several times in the past for both Ethereum and Bitcoin. You may have heard of these forked versions at the time, and you probably carried a few forked coins.
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