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Bitcoin, however, has been on a downward spiral since April, when it hit an all-time high of nearly $65,000. Since, the cryptocurrency has fallen more than 50% and nearly erased all of its year-to-date gains.
Extreme and sometimes unpredictable movements up and down are relatively common for cryptocurrency, and will likely continue.
“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 selloffs 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.
Only invest what you’re willing to lose
Financial experts generally advise that people looking to invest in bitcoin allocate just a small amount of their portfolio due to its volatile nature.
“People should only invest really what they’re willing to lose,” said Daniel Polotsky, CEO of CoinFlip, one of the largest bitcoin ATM companies in the U.S.
He added that people near retirement,