Cryptocurrency Shiba Inu (SHIB 17.63%) has made headlines for its eye-popping gains in 2021. According to Coinbase, it's up over 70,000,000% since August 2020, making at least one happy investor a multibillionaire. And that mysterious billionaire is suddenly moving billions of Shiba Inu coins, sparking some panic among retail investors. As of 10 a.m. EDT, Shiba Inu has fallen 23% over the previous 24 hours.
Social media was set ablaze last week with the revelation that an unknown person invested $8,000 in Shiba Inu in August 2020, before its massive bull run. This wallet holds an unbelievable 70 trillion coins that hadn't been touched since the initial purchase. Thanks to that (there's probably a lesson on the benefits of buy-and-hold investing in there somewhere), those coins were worth around $6 billion when Shiba Inu was hitting its peak.
However, late on Tuesday night, this Shiba Inu billionaire finally made a move. In four separate transactions, the owner moved equal amounts of Shiba Inu to four different addresses, amounting to over 40 trillion coins. The fear here is that this person could be preparing to sell the massive stake, which would cause Shiba Inu to tank much more than it is today.
According to CoinMarketCap, Shiba Inu has a circulating supply of around 549 trillion coins. The potential of liquidating 40 trillion, therefore, is indeed substantial news for investors.
That said, no one knows why this person is moving the Shiba Inu stake around. For all we know, the person could be buying more and just holding things in different places to protect the assets from theft or loss. But this situation does highlight the uncertainty involved with investing. There are many things outside of our control when we buy stocks or cryptocurrencies. If you own Shiba Inu, you don't know and can't control what this billionaire is about to do.
To me, this highlights the need to be diversified. If something bad does happen with Shiba Inu, you want your position to be small enough that it doesn't wipe you out. On the flip side, if Shiba Inu is poised for more mouthwatering gains, you don't need to own a big position for it to have a meaningful positive impact on your finances.