After a brief dip in late September, Bitcoin has catapulted to a price of more than $55,000 per coin, giving the asset a market cap of more than $1 trillion again. By early afternoon, BTC had dipped to just under $55,000, hovering around $54,800, but maintains a market cap of $1.033 trillion.
The coin has been highly volatile in recent months, when it has hovered just over the $40,000 mark. Investors are taking the recent jump in stride, according to a Time article published in partnership with NextAdvisor. “While in the long-term Bitcoin’s price has generally gone up, we experience a lot of volatility along the way,” Kiana Danial, founder of Invest Diva, told NextAdvisor.
Likewise, Humphrey Yang of personal finance podcast Humphrey Talks, said, “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.”
Given the volatility, if you plan to hold the asset, now may not be the best time to buy, NextAdvisor points out. The spike may not be a sign of a long-term reversal. NextAdvisor wrote, “Bitcoin’s price is just as likely to fall back down as it is to continue climbing.”
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Given the long-term potential of cryptocurrency as an asset class, it is also not wise to cash out on your gains right now. Instead, continue holding and wait for another dip to strengthen your position.
Your best move? Continue with your current investment strategy and use dollar cost averaging to purchase Bitcoin at a price you’re comfortable with. Make sure to keep an eye on your overall portfolio. The experts advise making sure crypto — as with other speculative assets like meme stocks — is just 5% of your total investment portfolio. And, of course, make sure you have emergency savings, retirement accounts and other expenses covered before putting your money into speculative investments.
With all that in mind, it’s worth noting that Bitcoin is up nearly 50% for the year and is now officially the best performing asset class of the year, according to CoinTelegraph.com. It is 13% ahead of commodities and 17% ahead of United States micro-cap companies.
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Last updated: October 6, 2021