What Does This Mean for Investors?
The price of Ethereum is hanging at $4,300 on Wednesday, after briefly falling below $4,000 last week.
President Joe Biden signed a $1.2 trillion infrastructure plan into law this week, which included measures that might have major tax ramifications for some cryptocurrency investors. Ethereum’s price reached a new all-time high of $4,865 on November 10th, just before the recent price drop. In recent weeks, the second-largest cryptocurrency has achieved multiple new all-time highs.
Before this recent downward trend, Bitcoin and Ethereum were both at or near all-time highs, with Bitcoin setting a new all-time high of over $68,000 this month.
Despite the price reductions in Bitcoin and Ethereum, experts’ recommendations for investors remain unchanged.
What Should Investors Of Ethereum Do Next?
Experts advise ignoring the ups and downs as with any long-term investment. The recent high price does not indicate that Ethereum’s volatility has subsided.
“The fundamental question is whether or not those who own these coins will continue to see compound, exponential growth? According to Jeremy Schnieder, the financial expert at Personal Finance Club, “nothing in the fundamentals of cryptocurrencies tells me that answer is yes.”
Because there is no certainty that the value of any cryptocurrency will rise, experts advise investing no more than 5% of your portfolio in cryptocurrency. Never invest if it means you won’t be able to accomplish other financial goals, such as paying off high-interest debt or putting money down for retirement.
If you’ve already achieved all of those goals, the greatest thing you can do is ignore the hype around fresh highs and lows. The greatest thing you can do, as with traditional long-term investment, is “set it and forget it,” according to Humphrey Yang, the personal finance expert behind Humphrey Talks.