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The price of Ethereum continued to fall below $2,000 on Thursday as crypto and stock markets struggle to regain upward momentum. This is Ethereum’s lowest price since July 2021.
The price of Ether has been extremely volatile in recent weeks amid a crypto and stock market retreat. Like all cryptocurrencies, Ethereum tends to follow Bitcoin’s lead. If Bitcoin falls in price, Ethereum will likely fall as well. But ethereum is also struggling with anticipation for its massive software upgrade.
Investors and developers call it “the fusion”, and it is expected to happen in the coming months, although Ethereum developer Tim Beiko tknow on April 11 that “the Merger” will not take place in June, as previously predicted. Beiko succeeded another tweet on April 12 say it would take a few more months.
It will change the way transactions are ordered on Ethereum, making it more efficient and sustainable for widespread use. But until that happens, experts are waiting to see how investors and companies building their technology on Ethereum’s platform react to the changes.
Experts say the crypto market is a reflection of heightened volatility associated with war, continued rising inflation and shifting US monetary policy. Experts also point to other factors such as the crypto market following the stock market, more mainstream adoption and falling prices in recent months as contributing to what we are seeing with crypto prices now.
Government officials are also still interested in more crypto regulation and even the possibility of creating a government-issued digital currency. The price of Bitcoin has had a similar rough stretch lately.
All of this provided a shaky start to the year for Ethereum, which dropped below $2,200 in January. The price of Ethereum is between $1,900 and $2,600 so far this week. Here’s how Ethereum’s current price compares to its daily highs over the past few months:
A week ago (May 5)A month ago (April 12)3 months ago (February 12)$2,932$3,072$2,954
After peaking at $4,100 on December 27, Ethereum has fluctuated between $2,100 and $4,000 in the following days. Despite the slow start to 2022, many experts are still optimistic and predict that the price of Ethereum could potentially hit $12,000 this year.
Despite the recent slump, Ethereum was still relatively strong near 2021. Ethereum set a new record when it went above $4,850 on November 10, and it carried that strength through December before falling back toward the end of the month. Even with the late slump, Ethereum ended the year where it started: in January 2021, Ethereum’s price was just over $1,000.
Like Ethereum, Bitcoin has also stalled in the past month after its own strong November; Bitcoin set a new record when it topped $68,000 on November 10. The future of cryptocurrency will certainly see a lot more volatility in the price of Bitcoin and Ethereum, and the expert advice for investors remains the same.
What Should Ethereum Investors Do?
As with any long-term investment, experts advise ignoring the ups and downs. The latest high price does not mean that Ethereum’s volatility is gone.
“The real question is, if you own these coins, will they continue to experience compound, exponential growth? Nothing in cryptocurrency fundamentals tells me the answer is yes,” said Jeremy Schnieder, the investment expert behind Personal financial club†
Because there is no guarantee that the value of cryptocurrencies will increase, experts advise never to invest more than 5% of your portfolio in cryptocurrencies. Never invest at the risk of failing other financial goals, such as paying off high-interest debt or saving for retirement.
If you’ve met all those benchmarks, it’s best to ignore the hype surrounding new all-time highs or lows. As with traditional long-term investing, the best thing to do is “set it up and forget it,” Humphrey Yang, the personal finance expert behind Humphrey Talks, previously told NextAdvisor.
Former NextAdvisor reporter Ryan Haar contributed.