Ethereum Dropped Back Below $4,000. 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 saw a big drop below $4,100 Friday — following a previous but brief drop below $4,000 last week.

The recent falling price follows President Joe Biden signing a $1.2 trillion infrastructure bill into law earlier this month, 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 when its price went over $4,865 on Nov. 10. The second-biggest crypto has now hit several new all-time highs in recent weeks. 

Before this current downward trend, Bitcoin and Ethereum had both been at or near their all-time highs lately, with Bitcoin setting a new all-time high over $68,000 this month as well. 

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

Despite the drops 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.

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