When stock shares tumble, you often see crypto holders (“hoarders”) dump their tokens for several predictable reasons. It’s a common cross-market behavior and doesn’t require any specific news event to explain.

Here’s why it happens:

1. Investors Need Cash (Liquidity Crunch)

When traditional markets fall, many investors face margin calls, losses, or general fear.
They sell whatever they can sell quickly — and crypto is extremely liquid and trades 24/7.

Result: Crypto gets dumped to raise cash fast.

2. “Risk-Off” Behavior

Both stocks (especially tech stocks) and crypto are considered risk assets.
When markets panic, investors shift into safer assets (cash, government bonds, etc.).

Result: Risky assets—like Bitcoin, ETH, and altcoins—get sold off first.

3. Fear Spreads Across All Markets

Financial panic is contagious.
If the stock market drops sharply, traders expect crypto will fall next.

Result: People sell pre-emptively to avoid even bigger losses.

4. Hedge Funds Unwind Positions

Large funds often hold both equities and crypto.
When one side of their portfolio collapses, they sometimes must unwind crypto positions to reduce exposure or meet obligations.

Result: Big players dumping crypto causes sharp drops.

5. Correlation Between Tech Stocks and Crypto

In recent years, crypto has often behaved like high-beta tech stocks — meaning it moves even more dramatically when tech goes down.

Result: Shares drop → crypto drops harder.

6. Stablecoin Flight

Some holders quickly convert volatile tokens into stablecoins (USDT, USDC, etc.) during market stress.

Result: It shows up as “dumping” even if they’re staying inside crypto.