Ethereum Dropped Back Below $4,000 Saturday. 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 dropped to below $3,700 Saturday morning, extending a sudden and decisive drop that started Friday afternoon.

The big drop comes after Ethereum had a strong week, nearly hitting $4,800 — close to its current all-time high — on Wednesday.

This week’s ups and downs come after multiple brief drops below $4,000 in recent days — the lowest Ethereum’s price had gone since early October. Ethereum set a new all-time high on Nov. 10 when its price went over $4,850.

Bitcoin and Ethereum had both been at or near their all-time highs before this recent volatility, with Bitcoin setting a new all-time high over $68,000 in November as well. Bitcoin also saw a big drop Saturday morning, falling below $50,000. The falling prices come after new comments last week from SEC Chairman Gary Gensler about cryptocurrency regulation, concern over the new omicron variant of the coronavirus, and the $1.2 trillion infrastructure bill President Joe Biden signed last month that contains several crypto tax reporting provisions.

[READ MORE:] Ethereum: What You Should Know Before You Invest

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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