Bitcoin, the world’s first and most-popular cryptocurrency, reached a new all-time high over $68,000 on Nov. 10.
Bitcoin’s previous record high came in October, when it nearly hit $67,000. Before these recent highs, Bitcoin has seen lots of ups and downs since its latest November high — including a drop below $30,000 in July.
Despite a new high and continued volatility, experts still expect Bitcoin’s price to increase to above $100,000 as early as this year.
What Should Bitcoin Investors Do?
A new record high definitely doesn’t mean Bitcoin’s volatility is over — in fact, expect more, experts say.
“It is a nascent industry, and as a result it’s highly volatile,” says Theresa Morrison, a CFP with the Beckett Collective. As such, keep your investment low enough that the “crypto tail doesn’t wag your investment dog,” says Morrison. In other words, don’t invest so much that crypto’s extreme volatility can wreak havoc on your total portfolio.
As a rule of thumb, experts recommend keeping any speculative investments — cryptocurrency, specialized ETFs, alternative assets — to less than 5% of your total portfolio. It’s also important to never invest in cryptocurrency at the expense of not meeting other financial goals like saving for retirement or paying off high-interest debt.
But if you’ve done all of these things and are wondering what to do after Bitcoin’s latest new all-time high: do nothing. The future of cryptocurrency will likely include plenty more volatility, so long-term investors should hang onto their coins, and don’t let the hype of these daily swings influence your investment decisions.
“If you believe in the long-term potential of [Bitcoin], just don’t check on it. That’s the best thing you can do,” Humphrey Yang, the personal finance expert behind Humphrey Talks, previously told NextAdvisor.
Read More
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- The Future of Cryptocurrency: 5 Experts’ Predictions After a “Breakthrough” 2021
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