The price of Ethereum fell below $3,500 on Wednesday, continuing a downward trend that began after Christmas and continued into 2022.
Ethereum has ranged between $3,600 and $4,000 in the days after reaching a high of $4,100 on December 27. So far this week, it’s been between $3,600 and $3,800.
Despite the latest drop, Ethereum is still holding up well in the run-up to 2021. When Ethereum surpassed $4,850 on Nov. 10, it set a new all-time high, which it maintained into December before reversing at the end of the month. Despite the late drop, Ethereum ended the year much above where it began: in January 2021, the price of Ethereum was just over $1,000.
The price drops and volatility come as the United States deals with new economic uncertainty surrounding the Omicron COVID-19 variant, new comments from Federal Reserve Chairman Jerome Powell on the economy, and ongoing comments from US policymakers like SEC Chairman Gary Gensler on cryptocurrency regulation.
Investors in Ethereum: What Should They Do?
Experts suggest 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 possess these coins will continue to see compound, exponential growth? According to Jeremy Schnieder, the financial guru 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 suggest investing no more than 5% of your portfolio in cryptocurrency. Never invest if it means you won’t be able to meet other financial objectives, such as paying off high-interest debt or saving for retirement.
