Bitcoin Is Back Over $40,000 Amid Volatility Stemming From War in Ukraine. Here’s What Investors Should Make of It – NextAdvisor

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John Puterbaugh is a journalist with more than 10 years of experience leading editorial teams in personal…
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Ryan Haar is a former personal finance reporter for NextAdvisor. She previously wrote for Bloomberg News, The…
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Bitcoin is back over $40,000, following a drop below $35,000 after Russia’s invasion of Ukraine last week.
The developing war in Ukraine introduces new and significant volatility to the crypto and stock markets, several experts told NextAdvisor. The crypto market has been increasingly tracking the stock market lately, which combined with more mainstream adoption and the slumping prices we’ve seen to start the year, makes it even more intertwined with developing circumstances in Eastern Europe, experts say.
Before the volatility in recent days, Bitcoin hit $45,000 in February for the first time since early January, when Bitcoin also saw its lowest price in 6 months when it dropped below $34,000. Bitcoin’s price has seen a 40% drop in value since its all-time high above $68,000 on Nov. 10, set back by surging inflation, lagging recovery in the job market, and the Fed’s ongoing signals that it would begin winding down pandemic measures to support the economy.

While Bitcoin’s price has seen multiple big drops since November, its new highs in 2021 and current price are still an impressive feat considering its humble beginnings and a price below $10,000 as recently as July 2020. Ethereum — the next most popular crypto — notched another new all-time high of its own when it went above $4,800 in November.

Though Bitcoin and Ethereum have both had ups and downs short of their all-time highs since then, many experts still expect Bitcoin’s price to exceed $100,000 at some point.
The volatility highlights a durable truth for Bitcoin: it is still a highly volatile and speculative investment. In fact, the last time the original cryptocurrency set a record high in mid-April, it abruptly lost over half of its value and plunged to around $30,000 by mid-July. Similarly, Bitcoin dropped back below $35,000 this month not long after its most recent November high.
So what should crypto investors do in light of this volatility? Nothing, according to the experts we’ve talked to. Given the crypto’s history of volatility, this increase doesn’t guarantee a long-term reversal. Bitcoin’s price is just as likely to fall back down as it is to continue climbing. The future of cryptocurrency is sure to include plenty more volatility, and experts say that’s something long-term crypto investors will have to continue dealing with.
If you’re investing in cryptocurrency, expect volatility to continue. That’s why experts recommend keeping your crypto investments to less than 5% of your total portfolio.
“I know these things are super volatile, like some days they can go down 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.” 

Just like you shouldn’t let a price drop influence your decision to buy crypto, don’t let a sudden price increase alter your long-term investment strategy. Even more importantly, don’t start buying more crypto just because the price is rising. Always make sure your financial bases are covered — from your retirement accounts to emergency savings — before putting any extra cash into a speculative asset like Bitcoin.
Bitcoin’s latest big jump also isn’t anything new. “While in the long-term Bitcoin’s price has generally gone up, we experience a lot of volatility along the way,” says Kiana Danial, founder of Invest Diva.

READ MORE: How Much to Invest in Cryptocurrency, According to 5 Experts
Investors should continue to hold and not worry about the fluctuations, like Danial, who says she’s not “jumping on the hype.”
No matter if crypto is going up or down, the best thing you can do is to not look at it. Set it and forget it like you would any traditional long-term investment account. “If you let your emotions get too much into it then you could sell at the wrong time, or you might make the wrong decision,” says Yang. “You stress out about it, and I don’t think that’s a healthy way to approach it.”
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