If this type of extreme drop bothers you, you may have too much riding on your crypto investments. You should only invest what you’re OK losing. But even if the drop is making you rethink your crypto allocations, the same advice still stands — don’t act rashly or upend your strategy too quickly. Reconsider what you might be more comfortable with going forward, such as allocating less to crypto in the future or diversifying through crypto-related stocks and blockchain funds rather than directly buying crypto (though you should still expect volatility when cryptocurrency markets fluctuate).
Nelson primarily invests in low cost index funds because “I can see history on that,” she says. The newness of cryptocurrency and lack of trackable data make her wary of these crazy swings.

New short-term investors who are selling their holdings in reaction to the drop may be influencing the continued dip in Bitcoin’s value, according to a recent report from Glassnode Insights, a blockchain analysis firm.
Interestingly, the breakout was initiated right as a report from the United States Bureau of Labor Statistics (BLS) showed a sharp 6.2% annual rise in the Consumer Price Index (CPI), a figure that has hit its highest mark in 30 years.