Bitcoin hit a new high last month. Crypto investors should ignore the ups and downs
Bitcoin hit a new all-time high by surpassing $ 68,000 for the first time on November 10.
While the price of Bitcoin has seen several declines since then, its latest new high and current price is an impressive achievement considering that just over a year ago the currency was hovering around $ 15,000 per coin. Ethereum – the next most popular crypto – hit a new all-time high when it surpassed $ 4,800 in November.
Although Bitcoin and Ethereum have both seen highs and lows below their all-time highs since then, many experts still expect the price of Bitcoin to exceed $ 100,000 at some point.
Despite the new record, Bitcoin remains a highly volatile and speculative investment. In fact, the last time the crypto hit an all-time high in mid-April, it abruptly lost more than half of its value and plunged to around $ 30,000 in mid-July.
So what should crypto investors do in light of this latest rise and subsequent lows? Nothing, according to the experts we spoke to. Given the crypto’s history of volatility, this increase does not guarantee a long-term reversal. The price of Bitcoin is just as likely to fall back as it is to continue to rise. The future of cryptocurrency will certainly include a lot more volatility, and experts say it’s something long-term crypto investors will need to continue to contend with.
What investors need to know
If you invest in cryptocurrency, expect volatility to continue. That’s why experts recommend keeping your crypto investments below 5% of your total portfolio.
“I know these things are super volatile, like some days they can go down by 80%,” Humphrey Yang, the personal finance expert behind Humphrey Talks, told NextAdvisor. “But if you believe in the long-term potential of [Bitcoin], do not check it. It’s the best thing you can do.
Just as you shouldn’t let a drop in price influence your decision to buy crypto, don’t let a sudden rise in price change your long-term investment strategy. Most importantly, don’t start buying more crypto just because the price goes up. Always make sure your financial bases are covered – from your retirement accounts to your emergency savings – before putting extra money into a speculative asset like Bitcoin.
Bitcoin’s latest big leap is nothing new either. “While in the long run the price of Bitcoin has generally gone up, we experience a lot of volatility along the way,” says Kiana Danial, founder of Invest Diva.
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Investors should continue to hold on and not worry about fluctuations, like Danial, who says she is not “jumping on the hype.”
It doesn’t matter if the crypto goes up or down, the best thing you can do is not watch it. Set it and forget about it like you would with any traditional long-term investment account. “If you let your emotions get in too much, you could sell at the wrong time or make the wrong decision,” Yang explains. “You’re stressing out about it, and I don’t think that’s a healthy way to approach it.”
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