Ethereum’s Price Falls Below $1,800 For the Second Time in May. Here’s What That Means for Investors

An image to accompany a story about recent Ethereum price trends Illustration/NextAdvisor
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Ethereum’s price fell below $1,800 Thursday as the crypto and stock markets struggle to recover from a widespread retreat. The stock market officially entered bear market territory last week for the first time since early 2020.

The price of ether has been extremely volatile over the last few weeks amid a broader market retreat from risky assets. It’s the second time this month that Ether has fallen below $1,800. The last time it fell below the $1,800 mark was in July 2021.

Like all cryptocurrencies, ethereum tends to follow bitcoin’s lead — which has been tracking with the stock market lately. That means if bitcoin is falling in price, ethereum is likely falling, too. But ethereum has also been grappling with anticipation for its massive software upgrade

Investors and developers are calling it “the Merge,” and it’s expected to happen over the next few months, though ethereum developer Tim Beiko tweeted on April 11 that “the Merge” won’t happen in June as previously forecast. Beiko followed up with another tweet on April 12 saying it would take a few more months.

It will change how transactions on ethereum are ordered, making it more efficient and sustainable for widespread use. But until that happens, experts are waiting to see how investors and companies building their tech on ethereum’s platform respond to the changes.

Experts say the crypto market is reflecting heightened volatility that comes with war, continued surging inflation, and shifting U.S. monetary policy. Experts also point to other factors like the crypto market tracking the stock market, more mainstream adoption, and slumping prices in recent months as contributing to what we’re seeing with crypto prices right now.

Government officials have also continued to show an interest in more crypto regulation and even the possibility of creating a government-issued digital currency. Bitcoin’s price has had a similarly rough stretch lately.

All this has made for a shaky start to the year for ethereum, which in January dropped below $2,200. Ethereum’s price has been between $1,900 and $2,200 so far this week. Here’s how ethereum’s current price compares to its daily high point over the past few months:

One Week Ago (May 18)One Month Ago (April 25)3 Months Ago (Feb. 25)
$2,018$2,808$2,781

After topping $4,100 on Dec. 27, ethereum has ranged between $2,100 and $4,000 in the days since. Despite the slow start to 2022, many experts are still bullish, predicting ethereum’s price could potentially hit and exceed $12,000 this year.

Despite the recent slump, ethereum still had a relatively strong close to 2021. ethereum set a new all-time when it went over $4,850 on Nov. 10, and it carried that strength into December before falling back by the end of the month. Even with the late slump, Ethereum closed the year way over where it was at the start: In January 2021, ethereum’s price was just a little over $1,000.

Like, Ethereum, bitcoin has stalled over the past month as well after its own strong November; bitcoin set a new all-time high when it went over $68,000 on Nov. 10. The future of cryptocurrency is sure to include plenty more volatility in the price of bitcoin and ethereum, and 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.

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Former NextAdvisor reporter Ryan Haar contributed.