Why Should Crypto Investors Ignore the Ups and Downs?
Bitcoin jumped above 51,000 USD Dollars on Oct 5, 2021, hitting a 24-hour high of 51,895.12 USD Dollars, according to Coin desk’s Bitcoin tracker.
The increase has continued for weeks to just over 40,000 USD Dollars since the last increase above 50,000 USD in early September.
What should crypto investors think of this recent surge? Nothing, according to the experts’ recommendations that we’ve researched so far.
Through September, Bitcoin saw daily highs of over 50,000 USD Dollars, but it has not gone above 50,000 USD since. The cryptocurrency (BTC) was over 60,000 USD in April and it was claimed that it couldn’t be replicated by a significant decline of below 30,000 USD Dollars.
However, the history of volatility within cryptocurrency does not guarantee a long-lasting reversal. The price of Bitcoin is likely to decline as much as it will continue to rise. Price volatility will continue without a doubt. That’s simply the fact of the matter for digital currencies — and even for fiat money too, and experts are saying that it is something that long-lasting blockchain investors will continue to grapple with!
What Should Crypto Investors Know Before Investment?
Crypto investors should expect continued volatility. For this reason, experts recommend limiting your cryptocurrency investments to no more than 5% of your whole crypto portfolio.
“I know these things are very volatile, like some days they can drop 80%,” Humphrey Yang, the personal finance expert behind Humphrey Talks, previously told NextAdvisor.
“But if you believe in the long-term potential of [Bitcoin], just don’t check on it. That’s the best thing you can do.” He also added.
Just as you shouldn’t allow a price drop while investing to alter your course, do not let a sudden price increase alter your long-term investment plan.
More importantly, do not start buying more cryptocurrencies just because the price goes up. Always make sure your financial fundamentals are set– including retirement accounts or emergency savings — before investing additional money in a digital asset like ETH, BTC, or something else.
Bitcoin’s recent big jump is also nothing new. “While the price of Bitcoin has generally risen in the long term, we are experiencing a lot of volatility along the way,” says Kiana Danial, Invest Diva’s founder.
Investors should keep holding on and not worrying about volatility, like Danial, who says he does not go public.
Whether cryptocurrencies are going up or down, the ideal strategy is to avoid looking at them. Set it up and forget about it like any conventional long-term savings account.
“If you let your emotions run too high, you could sell at the wrong time or make a wrong decision. You stress about it, and I don’t think it’s a healthy approach,” says Yang.
What To Takeaway
To shield yourself, don’t make investments that you couldn’t afford to lose in the future, and brace yourself for losses. Today, Bitcoin is up. Tomorrow, it could be anywhere.
Remember, you are not only putting your cash on the line, but also your emotions — so it may be a rollercoaster ride!