Ethereum’s Price Lags As Crypto Market Continues to Meltdown. Here’s What That Means for Investors

An image to accompany a story about recent Ethereum price trends Illustration/NextAdvisor
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The crypto world has been on fire (and not in a good way) ever since FTX filed for bankruptcy on Nov. 11.

FTX was previously one of the largest and fastest-growing crypto exchanges in the world; prices have been highly volatile since its collapse. The fallout is ongoing: BlockFi, another major crypto exchange and lender, filed for its own bankruptcy earlier this week. The current market meltdown is keeping crypto prices low, including ethereum.

Ether, ethereum’s native token, was reaching back up above $1,600 before the FTX drama started unraveling. Now, the token is struggling to reach $1,300, sitting right below that price point as of Friday afternoon.

The recent string of bankruptcies threaten to prolong the current crypto bear market (dubbed as a “crypto winter” by investors), but experts can’t say for certain what the long-term effects of FTX’s implosion will be. That noted, experts do think that the current market meltdown is likely deepening the crypto price drops we’re seeing this year.

Aside from the current crash, experts say the source of crypto’s volatility up until now has been surging inflation, shifting U.S. monetary policy, mainstream adoption and the continuing war in Ukraine. Government officials have also continued to show an interest in more crypto regulation and even the possibility of creating a government-issued digital currency.

All this made for a shaky three-quarters of the year for ethereum. Here’s how ethereum’s current price compares to its daily high point over the past few months:

One Week Ago (December 1)One Month Ago (November 8)3 Months Ago (September 9)
$1,298.94$1,569.99$1,635.93
Prices updated: December 8, 2022

After topping $4,100 on Dec. 27, ethereum has steadily trended downwards, albeit with rallies here and there, ranging between $900 and $3,800 throughout the year.  Many experts are still bullish, despite the recent slump, predicting ethereum’s price could potentially hit and exceed $12,000 this year.

Ethereum still had a relatively strong close to 2021. ethereum set a new all-time high 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 The token 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.