Skip to content
- VirtualBacon has reduced his crypto portfolio by nearly 50%, citing Fed liquidity tightening as a risk to the market.
- He sold 24 of his 36 altcoins, keeping Bitcoin (30%), Ethereum (25%), and Solana (28%) as core holdings.
- Despite short-term caution, VirtualBacon remains optimistic about a 2025 crypto market recovery as liquidity expands.
As the U.S. Federal Reserve continues to follow its tightening liquidity policy, cryptocurrency analysts are predicting near-term headwinds for the market. One such analyst, VirtualBacon, a very well-respected name in the crypto community, recently shared his bearish outlook on the current market situation.
In a social media post on platform X, VirtualBacon revealed that he has drastically reduced his crypto portfolio, cutting it by a whole third. In his view, the crypto market will face several uncertainties in the coming months because of the Fed’s ongoing liquidity constraints.
According to VirtualBacon, the U.S. Federal Reserve’s tightening in liquidity will probably cause short-run turmoil in the crypto market. In order to reduce his exposure, the analyst sold 24 of the 36 altcoins with which his $100,000 portfolio was originally composed. The calculated step, though risky for short-run profit-taking, is in line with his overall view that the market is not in a healthy position in the near future.
Nonetheless, VirtualBacon’s not entirely bearish on the outlook. He remains bullish on the long-term outlook for cryptocurrencies. Specifically, he foresees a bull run in 2025 when the macro environment stabilizes and there’s more liquidity globally. To weather the storm for those who must ride it out, patience is his advice, given the market will recover when the tightening cycle is reversed.
VirtualBacon’s Low-Risk Crypto Portfolio
Despite reducing his holdings, VirtualBacon maintained a portion of his portfolio in a few solid cryptocurrencies. Bitcoin (BTC) remains a core part of his plan and still occupies 30% of his portfolio. Ethereum (ETH) occupies 25%, and Solana (SOL) occupies 28%. Stablecoins occupy less than 4% of his portfolio, reflecting his conservative approach in uncertain times.
With far fewer altcoins available to him to choose from, just 12 remaining in his portfolio, each represents less than 2.5% of his holdings in his portfolio. The focus on larger and better-established assets indicates a direction toward a conservative and risk-averse investment strategy. Notably, VirtualBacon avoided low-market-cap coins and new crypto releases and instead held on to his investments in projects with stronger solidity.
While his portfolio may be smaller in size, VirtualBacon still maintains a portfolio of tokens he thinks will weather the storm. Included in the mix are SUPER and BEAM, both within the gaming sector. When it comes to the new AI sector, NEAR and TAO are his bets on the long-term value of the tokens. In the sector of decentralized finance (DeFi), his bet is on AMPL, and BORG, a utility token, is another significant holding.
Interestingly, VirtualBacon also seems to be a fan of meme coins, which have experienced a significant amount of volatility within the last year. PEPE, which is one of the notable meme coins, is in his portfolio, demonstrating that his perspective is not that all meme coins are created equally and that some do have longevity within the space.
Related | Mt Gox Moves $1B in Bitcoin as Creditor Payouts Loom
