Bitcoin resting on United States dollar banknotes.
Nicolas Economou | NurPhoto | Getty Images
Bitcoin‘s trademark volatility is again rearing its head, showing investors the risk they’re signing up for when they put money into the cryptocurrency.
The digital coin cratered as much as 10% on Monday, amid a global market decline. Bitcoin was last down nearly 8%, hovering around a price of $43,800 per coin, according to data from Coin Metrics. The rest of the cryptocurrency market was also in a slump, with ether falling more than 9% to about $3,046 per coin.
The extreme swings up and down are relatively common for cryptocurrencies, and investors can expect them to continue in the future.
“The only thing I can expect for sure is volatility,” said David Yermack, a professor of finance at New York University Stern School of Business. “From day one, this has been a risky investment for people.”
Bitcoin has seen both astronomical growth over the last decade and major sell-offs at various points in between. Although many bulls point to its past performance as a sign that the cryptocurrency will continue to surge in the future, that might not happen, according to Yermack.
“It’s a purely speculative asset,” he said, adding