Ethereum dropped below $4,200 overnight and is hovering around $4,300 Tuesday afternoon, less than a week after its latest new all-time high.
The pronounced drop came hours after President Joe Biden signed a $1.2 trillion infrastructure bill into law, which contained provisions that could have significant tax implications for some crypto investors. Before this latest drop in price, Ethereum set a new all-time high last Wednesday when its price went over $4,865. The second-biggest crypto has now hit several new all-time highs in recent weeks.
Bitcoin and Ethereum are both at or near their all-time highs to start the week, with Bitcoin setting a new all-time high over $68,000 last week as well, according to Coindesk’s Ethereum price tracker. The current surge in crypto prices follows a record-breaking October for the stock market, as well as the debut of the New York Stock Exchange’s first Bitcoin ETF.
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Despite the jumps in the price of Bitcoin and Ethereum, experts’ advice for investors remains the same.
What Should Ethereum Investors Do?
As with any long-term investment, experts advise to ignore the ups and downs. The latest high price doesn’t mean Ethereum’s volatility has gone away.
“The real question is, owning these coins, are they going to continue to experience compound, exponential growth? Nothing in the fundamentals of cryptocurrency tells me that answer is yes,” says Jeremy Schnieder, the investing expert behind Personal Finance Club.
Because there’s no guarantee that any crypto’s value will increase, experts advise to never invest more than 5% of your portfolio in cryptocurrency. Never invest at the risk of not meeting other financial goals like paying off high-interest debt or saving for retirement.
If you’ve met all of those benchmarks, the best thing you can do is ignore the hype around new record highs or lows. Like with traditional, long-term investing, the best thing you can do is “set it and forget it,” Humphrey Yang, the personal finance expert behind Humphrey Talks, previously told NextAdvisor.