Retail Investors Cash Out Nvidia Gains: Will They Dive into Crypto?

Hear this, folks: Retail investors who snapped up Nvidia during the dip are now hitting the sell button. The big question buzzing around trading floors is: Will they take their profits and jump into the wild world of crypto?

While retail investors are cashing in, institutions are still gobbling up Nvidia shares. According to the sharp minds at Vanda Research, retail dumped a whopping $258 million worth of Nvidia stock in the week ending June 4. That's a serious move!

Let's not forget, these retail investors made bank on Nvidia between 2023 and 2024. But now? They're on the prowl for fresh action. Vanda's sentiment survey shows a wild swing in 2025—from a 10-point buy signal to a 15-point sell signal. Talk about a flip!

This vibe matches up with Sherwood's report, which clocked a staggering $4.9 billion in retail outflows during the third week of May. That's the biggest cash-out for Nvidia since 2015 and the longest retail sell-off streak since March 2022. And guess what? They're doing the same with Tesla.

Why are retail investors dumping Nvidia?

Those who scooped up Nvidia shares post-DeepSeek launch are now hunting for juicier prospects. Analyst Ben Bajarin drops the truth bomb: Nvidia's stock has already baked in tons of growth potential. Traders are craving that high-octane upside elsewhere.

And here's another twist: U.S. tariffs and chip restrictions on China have everyone on edge. In this high-stakes game, risk-takers are eyeing AI stocks and, yep, crypto. Vanda Research says retail investors are all about those volatile small-cap AI stocks now, chasing those big gains.

Remember, Nvidia and Bitcoin (BTC) have been tight for years. A 2024 study crunched the numbers and found a solid correlation above 0.80. It's all thanks to Nvidia's role in powering up crypto mining rigs. This means many Nvidia investors are no strangers to crypto, maybe even diving in themselves.

But hold up—while retail is stepping back from Bitcoin, institutions are piling in. Over the last five years, Bitcoin's 992% return can't touch Nvidia's mind-blowing 1,523.1%. Yet, no clear signs yet that retail is making a mass move from Nvidia to Bitcoin. Sure, historical ties and shared investor vibes hint at a potential link, but the current mood? Not so much.

So, will those cashing out on Nvidia jump into crypto? It might all hinge on those big macro moves—interest rates, regulatory shake-ups, and trade policies. Buckle up, because this ride's far from over!