Bitcoin – the world’s number one digital currency by market cap – has hit a new all-time high of roughly $68,000 per unit.
Bitcoin Hits a New Peak
While the currency is back down in the $67,000 range at the time of writing, we are clearly seeing a strong pattern. 2021 has been the year of all-time highs for bitcoin, as the currency first rose to about $64,000 per unit before stepping back and rescinding some of its gains. The bearish period that came soon after lasted several months, and there was a time when bitcoin was briefly trading below the $30,000 range, meaning the currency had lost more than 50 percent of its value.
But this period didn’t last anywhere near as long as some analysts thought it would. The currency ultimately jumped back into the $40,000 range, where it stayed for the next few weeks before surging back to $60,000. From there, it hit $66,000 when it was announced that the Pro Shares bitcoin ETF was trading on the New York Stock Exchange (NYSE), and now, with this rise to $68,000, the asset has reached its tallest peak in roughly 13 years.
The good fortune of BTC appears to be rubbing off on other coins as well. Ethereum, for example, has also hit a new high of more than $4,800 per unit, though at press time, it has fallen back into the $4,700 range. The point is that several coins are striking new peaks, and the industry has grown to more than $3 trillion as a result.
Despite the good fortune, there are still some analysts out there warning traders that now may not be the best time to buy. For one thing, if currencies are hitting peaks, there is a good chance you’ll be paying too much for assets that could ultimately experience a few dips before striking new highs.
However, they are more worried about the volatility associated with cryptocurrencies and say that getting involved just because something is surging is a bad idea. One needs to be fully aware that buying a risky, volatile asset could potentially lead to portfolio crashes. Anjali Jariwala – a certified financial planner – explained in an interview:
In order to determine how much one is able to place into a riskier asset class, it is important to first assess your own financial health and make sure you are funding your required buckets first.
Jariwala further states that nobody should invest in cryptocurrency unless they specifically have money to burn. In other words, don’t use money you would use to pay your mortgage to buy crypto. Instead, be cautious, and only use funds you can afford to lose.
Don’t Spend the Money You Need
It is important to think about not only the upcoming year, but the next three to five years.