Bitcoin (BTC -1.44%) got a serious boost on Thursday as it pushed past the $100,000 mark for the first time since February. The leading cryptocurrency rose 6% in 24 hours. Ethereum (ETH -4.15%) soared more than 21% in the same period.

Cryptocurrencies and stocks were both buoyed by news that the U.S. and U.K. had reached a trade agreement. Meanwhile, the U.S. dollar continues to struggle. The U.S. dollar index, which tracks its performance against several other major currencies, is down over 7% year to date.

It’s unsurprising that a falling dollar and soaring Bitcoin have investors wondering how best to build and preserve wealth. If you’re one of them, try to tune out some of the immediate noise and focus on what’s right for you in the long term.

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Should investors buy, sell, or hold Bitcoin?

For crypto investors, rallies like this are reassuring. They can also trigger panic buying and speculation — both of which are unhelpful ways to invest. There’s no right or wrong decision on whether to buy Bitcoin, but there are certainly right and wrong motivations for doing so.

For example, don’t invest in Bitcoin because you’re scared of missing out. Instead, do your research so you understand what role Bitcoin might play in our economy and money management in 10 years’ time. Similarly, if you’re looking to profit from a short-term price jump on the back of more trade deals, take a beat. Speculative investments can be extremely risky, and Bitcoin doesn’t always do what people think it will.

It’s an exciting time for cryptocurrency, and the media is full of Bitcoin bulls proclaiming its bright future. However, it’s still a risky asset. There’s a lot we don’t know about how it will develop. Here are some common reasons to buy, sell, and hold Bitcoin:

• Deciding to buy: Bitcoin has delivered extraordinary results during the past five and 10 years, outperforming many other assets. Common reasons for buying include a pro-crypto administration that promises clearer regulation, increased availability in the form of Bitcoin exchange-traded funds (ETFs), and the possibility of a hedge against global economic upheaval.
• Deciding to sell: If you’ve lost faith in Bitcoin’s long-term potential or think there are better opportunities out there, it might be time to sell. Other reasons include taking profits or rebalancing your portfolio. Make sure you understand the tax implications and keep records of all your transactions.
• Deciding to hold: HODLing — holding on for dear life — is a common crypto phrase. It usually applies to the difficult times, but it’s just as true when prices are rising. You might want to cash in now that Bitcoin is approaching its all-time high again. Keep your eyes on your long-term goals and remind yourself of why you bought in the first place.

A note on timing the market

If you’ve been watching Bitcoin’s price in the past few months and waiting for the right time to buy, the latest price surge might have you worrying that it’s too late. As an investor, it’s tempting to try to time the market and buy at the lowest price. Crypto’s volatility amplifies that temptation.

The thing is, it’s almost impossible to know when an asset has reached its low. What tends to happen when people wait for the best possible time is that they stay on the sidelines and never buy at all. To put it in perspective, experts like ARK Invest’s Cathie Wood believe that Bitcoin might reach $1.5 million by 2030. If that’s even partly true, the difference between buying in at $90,000 and $100,000 could be negligible.

One good tactic to avoid the timing trap is dollar-cost averaging. That involves buying smaller amounts of crypto at regular intervals, rather than in one lump sum. For example, you might break a $1,000 investment into five weekly purchases of $200, or buy $100 of Bitcoin on the first of every month for 10 months.

Making regular set investments is a popular strategy to even out price swings. Indeed, almost 60% of crypto investors surveyed by Kraken last year said it was their primary way to invest.

Focus on what’s right for you

Ultimately, deciding whether to buy, sell, or hold any investment comes down to your overall strategy and investment thesis. Try to think about how Bitcoin might fit into your portfolio in the long term, and make sure risky assets only make up a small portion of your wider portfolio.