HOW TO DEAL WITH BITCOIN DROPS?

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HOW TO DEAL WITH BITCOIN DROPS?

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Bitcoin and other cryptos drop. What should you do as crypto investor?

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Bitcoin took a sudden drop Tuesday after climbing past $52,000 Monday.

The back-and-forth price movement follows El Salvador President Nayib Bukele revealing Monday that the country has purchased 400 Bitcoins worth about $20.9 million in a series of tweets. El Salvador is the first country to legalize Bitcoin for use as a currency.

The price of Bitcoin last dipped below $30,000 in July, and had recently been buoyed above $50,000.

Bitcoin hit a high of more than $60,000 in April, and the latest movement highlights the cryptocurrency’s volatility in a time when more and more people are interested in getting in on the action. In the weeks since the most recent July low point, Bitcoin has risen steadily, with several daily highs above $50,000. Again, Bitcoin is very volatile, so these ups and downs are par for the course.

We’ve talked to investing experts and financial advisors who advise against sinking much of your portfolio into the asset class for this very reason. They work with clients to make sure volatile crypto investments aren’t getting in the way of other financial priorities, like saving an emergency fund and paying off high-interest debt.

“You have a high chance of losing it all, but a small chance of winning it big,” says Nate Nieri, a CFP with Modern Money Management in San Diego, California. “Don’t gamble an amount that would burden your family or prevent you from achieving your goals” if you lost it all, he says.

How does this latest crash compare to previous ones, or even to regular stock market drops — and what does it mean for investors?

What Does This Price Drop Mean for Crypto Investors?
For those who invest in crypto for the long-term using a buy-and-hold strategy, swings like this are to be expected. The recent dips are nothing to be overly worried about, according to Humphrey Yang, the personal finance expert behind Humphrey Talks, who says he avoids checking his own investments during volatile market dips.

“I’ve been through the 2017 cycle, too,” Yang says, referencing the ‘crypto crash’ of 2017 that saw many major cryptocurrencies, including Bitcoin, lose major value. “I know that these things are super volatile, like some days they can go down 80%.”

Experts recommend keeping your cryptocurrency investments to under 5%
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Crypto Trading
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