You may have noted the reports of volatility in current cryptocurrency news. Investors are learning to be comfortable with this fact. According to Ollie Leech of Coindesk, the volatility of the market is due to it being an “immature market”.
Anything as insignificant as a new federal regulation to a celebrity tweet can significantly impact prices. For example, a recent tweet from Tesla’s Elon Musk announcing, “Tesla will make some merch buyable with Doge & see how it goes,” sent Dogecoin prices soaring to an increase of more than 25%.
For this reason, many investment experts are warning against adding huge amounts of crypto to your portfolio. They recommend keeping holdings down below 5% of your portfolio.
A Plan to Invest
The best way to invest in cryptocurrency right now is to not keep a close watch on it. Long-term investors stick to a “set it and forget it” strategy. If you find it difficult to remain calm with the extreme price dips, it is likely because you have too much invested. Regardless of whether you are investing in cryptocurrency or traditional stocks, you need to have a plan in place and stick to that plan.
You may be tempted to buy during the dip, especially if the asset is one that you particularly like. However, at the moment that may not be the best course of action for you to take. Continue to follow current cryptocurrency news to stay up to date on the volatility and eventual stability of the market to determine when is the best time to invest.