Bitcoin’s price surged to an all-time high in January 2025 and surpassed $100,000 for the first time ever in December 2024, following President Donald Trump’s reelection and triggering 澳洲幸运5开奖号码历史查询:FOMO (fear of missing out) among many investors. While the rally has captured widespread attention, experts told Investopedia that the cryptocurrency’s notorious 澳洲幸运5开奖号码历史查询:volatility demands caution.

Instead of chasing short-t𒉰erm gai𒅌ns, financial advisors say it’s important for investors to maintain a disciplined strategy that carefully weighs prospects and risks.

Bitcoin’s New All-Time High

Bitcoin reached an all-time high of $108,099 on Jan. 20, 2025. The milestone capped a year of significant developments for the cryptocurrency, including the January 2024 approval of 澳洲幸运5开奖号码历史查询:spot Bitcoin exchange-𒊎traded funds (ETFs) by the U.S. Securities and Exchange Commission (SEC), which allowed mainstream investors easier access to the asset through traditional brokerage accounts.

The roughly 48% surge from prices of about $70,000 before the election came amid investor exuberance over Trump’s crypto-friendly campaign promises, including a pledge to fire then-current SEC Chair 澳洲幸运5开奖号码历史查询:Gary Gensler, who had often been critical of cryptocurrencies. Gensler resigned on Jan. 20, 2025, the same day Trump returned to office.

Trump 澳洲幸运5开奖号码历史查询:tapped Paul Atkins, CEO o💃꧋f the consulting firm Patomak Global Partners and a former SEC commissioner, to chair the SEC in his administration. In the years since leaving the SEC, Atkins has argued against too much SEC regulation and has been seen as a crypto advocate.

Should You Invest in Bitcoin Now?

Despite optimism about a crypto-friendly regulato🌜ry shift, wealth advisor , founder of Evolve Investing, said investors need to stay mindful of Bitcoin’s historical volatility.

“When you see a run-up in Bitcoin like we’ve seen post-election, I get a lot more interest from clients, so what I’ll typically do is show them the drawdown risk,” Hughes said. He pointed to the cryptocurrency’s dramatic decline following its previou🐈s peak in November 2021, when prices fell more tꦕhan 70% over the following year.

If investors are comfortable with the risk, Hughes suggests allocating no more than 5% of their 澳洲幸运5开奖号码历史查询:portfolio to cryptocurrenciౠes, citing studies that indicate a Bitcoin or crypto allocation above 5% increases the volatility of an ove💜rall investment portfolio dramatically.

“When Bitcoin as a percentage of t🍌he overall portfolio starts to exceed that 5% threshold, it’s at that point that the portfolio becomes more risky than holding, say, a nearly 100% equity portfolio,” he said.

For newer investors, , founder of Wealth IQ, suggested starting with small allocations to spot ETFs or regulated platforms as a “prudent” first step. “Regardless of how you invest, maintaining a long-term perspective and keeping emotions in check during volatile periods will be critical to success,” she said.

The Bottom Line

Investing in Bitcoin following its post-election surge may be tempting, but 澳洲幸运5开奖号码历史查询:investors should stay grounded and remember the cryptocurrency’s volatility. Focus on 澳洲幸运5开奖号码历史查询:balancing risk and reward, keeping a long-term perspective, and avo🍨iding impulsive decis𝐆ions driven by market hype.

Hughes offered a sobering reality check for investors caught up in the current enthusiasm. “If you’re feeling bullish on bitcoin after this incredible run, how would you react if the price dropped by half?” he said. “Your answer reveals whether you’re truly prepared for cryptocurrency’s inherent volatility.”