Billionaires sell Nvidia stock, buy index fund that could soar as much as 83,000%, Wall Street experts say

Recently filed Forms 13F show that two prominent hedge fund managers sold shares of Nvidia during the second quarter while reallocating capital to the iShares Bitcoin Trust Fund (NASDAQ: IBIT)an exchange-traded fund (ETF) that tracks Bitcoin (CRYPTO: BTC).

• David Shaw of DE Shaw sold 12.1 million shares of Nvidia, reducing his position by 52%. At the same time, he bought 2.4 million shares of iShares Bitcoin Trust, increasing his position by 1,658%.

• Steven Cohen of Point72 Asset Management sold 409,042 shares of Nvidia, reducing his position by 16%. He bought 1.6 million shares of iShares Bitcoin Trust, diversifying into cryptocurrencies for the first time.

The deals by Shaw and Cohen are notable because both fund managers have credentials that go beyond their billionaire status. DE Shaw and Point72 rank second and 13th, respectively, among the top 20 hedge funds in history, according to LCH Investments.

That said, investors shouldn’t interpret their trades to mean that Nvidia is a bad investment, but rather as an important portfolio diversifier. Artificial intelligence (AI) stocks like Nvidia could create substantial wealth over time, but so could cryptocurrencies like Bitcoin. Some Wall Street pundits believe that Bitcoin (and therefore, the iShares Bitcoin Trust) could surge 83,000%.

Some Wall Street experts predict colossal gains for Bitcoin holders

Bitcoin entered the year on a roll. Its price had more than doubled in 2023, and gains accelerated in early 2024 when the U.S. Securities and Exchange Commission (SECOND) approved the trading of spot Bitcoin ETFs on U.S. exchanges. Excitement over the April halving event also contributed to this bullish momentum.

Bitcoin hit a record high above $73,000 in March before faltering as investors lost their appetite for risk. Economic uncertainty has caused a reversal in sentiment. Investors started the year expecting the Federal Reserve to cut its benchmark interest rate by June, but policymakers have kept rates at their highest level in two decades.

Things went from bad to worse in early August. Recession fears resurfaced when a disappointing jobs report raised questions about the Federal Reserve’s slow pace. That worry sent the stock market into a tailspin, and the cryptocurrency market suffered its worst drop since FTX collapsed in 2022.

Bitcoin is currently trading at $59,000, about 20% below its March peak. But these Wall Street pundits remain extremely bullish on the cryptocurrency.

• Bernstein analysts Gautam Chhugani and Mahika Sapra estimate that bitcoin will trade at $200,000 by 2025, $500,000 by 2029, and $1 million by 2033, with bitcoin spot ETFs unlocking demand from retail and institutional investors. The upper bound of this forecast implies an upside of 1,595%.

• Ark Invest released a valuation model in 2023 that valued Bitcoin at $1.5 million per coin by 2030. But CEO Cathie Wood revised that figure to $3.8 million at a Bitcoin conference in…