Crypto prices continue to rise after falling dramatically in January. Bitcoin is back above the $40,000 mark, and Ethereum is creeping toward $3,000 as of Friday afternoon.
Many experts expected as much. “As for the Bitcoin price drop, it has been pretty cyclical. It’ll be back up,” Chris Chen, CFP of Insight Financial Strategists in Newton, Massachusetts, recently told NextAdvisor. Wendy O, crypto investor and popular TikToker, shared similar thoughts, saying crypto volatility is simply “par for the course.”
“Anytime you have a really volatile, upward movement, you should also be prepared for a very volatile, downward movement,” O recently told NextAdvisor.
The week of Jan. 23 was the crypto market’s worst stretch in months. Bitcoin fell below $34,000 in January, compared with an all-time high of nearly $69,000 in November. Ethereum also fell below $2,200 in January. The significant price drops occurred while the stock market was experiencing its worst week in nearly two years, and after the release of the Federal Reserve’s long-awaited report on a possible government-issued digital currency. The crypto market cap fell below $2 trillion amid the sell-off, according to CoinMarketCap data.
Meanwhile, there are proposals in Wyoming and Arizona to accept tax payments in Bitcoin and other cryptocurrencies. Mark Zuckerberg’s crypto project Diem is officially shutting down. And India is planning to launch a digital version of the rupee and tax cryptocurrencies and NFTs.