On Oct. 6, bitcoin hit an all-time high. 

Things haven’t been going well since, with the cryptocurrency down 17% in November alone, and December starting out with a 7% drop, and then a 7% gain.

What’s happening on the blockchain?

Northeastern University cryptocurrency experts Ravi Sarathy and Alper Koparan said many macroeconomic factors — as well as the inherent volatility of bitcoin and other cryptocurrencies — are contributing to the recent wide swings in valuation.

“I would say that, more than not, there is an overenthusiasm for all things crypto,” said Sarathy, professor of international business and strategy at Northeastern.

But the experts also said bitcoin and cryptocurrencies in general are likely here to stay.

“Cryptocurrency markets, I believe those markets will be there forever, regardless of the price of bitcoin,” said Koparan, an assistant teaching professor of finance. “It’s like a playground for individual investors. It’s something you can do over the internet without any limitations, restrictions. That activity will continue.”

Bitcoin hit an all-time high of around $126,000 on Oct. 6, after rising 33% in 2025. But the world’s largest cryptocurrency by market value has since tanked — down roughly 14% by the end of October, down 17% in November,  and down another 7% on Dec. 1, although it erased that most recent loss the next day.

Sarathy and Koparan both said that bitcoin — which arose from the 2008-2009 Great Recession as a decentralized, easy and fast, peer-to-peer trading network — is inherently volatile for several reasons. 

First, its demand exceeds the total circulating supply, and its production is limited to 21 million coins, which the cryptocurrency is rapidly approaching. 

Cryptocurrencies like bitcoin are also not tied to any country’s currency and are readily accessible to individual investors through the blockchain — a digital ledger where transactions are recorded. 

Finally, cryptocurrencies have limited regulation. This can lead to frequent speculation — either buying bitcoin or a cryptocurrency and hoping to sell it for a quick profit or shorting it — or using bitcoin as leverage to buy more of a financial product. 

“That’s really where I think the big, big volatility comes from,” Sarathy said.

But it’s not just individual investors who are in on the game.

While the Securities and Exchange Commission under President Joe Biden seemed “somewhat skeptical” of cryptocurrencies and blockchain-based ventures, the second Trump administration marked a “fairly dramatic shift” toward these ventures, Sarathy said.

This encouraged institutional and corporate investors to enter the crypto market, particularly bitcoin, by investing in exchange-traded funds, or ETFs, related to crypto, Koparan said.

But recently, institutional investors have reversed course, favoring safer assets such as gold and silver.

“Within the last two years, we have seen significant inflow from funds or institutional investors on ETFs,” Koparan said. “But the end of October and November were months with negative flows.”

Moreover, Koparan said global bond markets are in flux. 

The Bank of Japan is expected to raise interest rates that have been around 0% for over a decade, while the Federal Reserve is expected to cut interest rates in the United States, Koparan explained. 

This is prompting concerns of a reversal in the flow of “carry trades” that have fueled growth in the United States and other popular markets, Koparan said. 

In a carry trade, an investor borrows in the currency of a country where interest rates are low, (for example, Japan) and uses it to invest in a currency where interest rates are higher, (for example, the United States) and then, upon the investments’ maturity, converts the net amount back to the original currency.

“It may be certain investors read this as a warning signal,” Koparan said. “And what you would do in such a situation is you would simply exit high-risk investments, and bitcoin is one of them.”

So, will the crypto market collapse as institutional investors flee bitcoin?

Not necessarily. 

“In the history of bitcoin, there are multiple time frames that we can relate to the events of today,” Koparan said. “The only difference today is that this price movement, price action is mostly due to institutional investors.”

The market has weathered downturns before, most notably in the November 2022 FTX collapse, Sarathy added. 

But he noted that the long-term trend for bitcoin should be considered. 

In about 15 years, bitcoin has gone from zero to $120,000, and now it’s down to about $91,000, Sarathy said. “But it’s still pretty amazing.”