The latest increase follows weeks of hovering just over
$40,000 since its last push over $50,000 in early September. It also brings
Bitcoin closer to its all-time high above $60,000 in April, a high that was
followed by a decisive drop to under $30,000 as recently as July 20.
So what should crypto investors make of this latest
increase? Nothing, according to the experts we’ve talked to.
But given the crypto’s history of volatility, this increase
doesn’t guarantee a long-term reversal. Bitcoin’s price is just as likely to
fall back down as it is to continue climbing. The price swings are going to
keep happening, and experts say they’re something long-term crypto investors
will have to continue dealing with.
What Investors Should Know
If you’re investing in cryptocurrency, expect volatility to
continue. That’s why experts recommend keeping your crypto investments to less
than 5% of your total portfolio.
“I know these things are super volatile, like some days they
can go down 80%,” Humphrey Yang, the personal finance expert behind Humphrey
Talks, previously told NextAdvisor. “But if you believe in the long-term
potential of [Bitcoin], just don’t check on it. That’s the best thing you can
do.”
Just like you shouldn’t let a price drop influence your
decision to buy crypto, don’t let a sudden price increase alter your long-term
investment strategy. Even more importantly, don’t start buying more crypto just
because the price is rising. Always make sure your financial bases are covered
— from your retirement accounts to emergency savings — before putting any extra
cash into a speculative asset like Bitcoin.
Bitcoin’s latest big jump also isn’t anything new. “While in
the long-term Bitcoin’s price has generally gone up, we experience a lot of
volatility along the way,” says Kiana Danial, founder of Invest Diva.
Investors should continue to hold and not worry about the
fluctuations, like Danial, who says she’s not “jumping on the hype.”
No matter if crypto is going up or down, the best thing you
can do is to not look at it. Set it and forget it like you would any
traditional long-term investment account. “If you let your emotions get too
much into it then you could sell at the wrong time, or you might make the wrong
decision,” says Yang. “You stress out about it, and I don’t think that’s a
healthy way to approach it.”