Cryptocurrency prices were volatile on Monday morning, after a wild weekend of selling that saw some tokens plunge by as much as 13%.
Bitcoin (BTC-USD) was down 1.2% to trade at $57,096 (£41,113) by 9.40am in London. Meanwhile, ethereum (ETH-USD), the second largest cryptocurrency, was down around 1% to trade at $2,253.41. Ripple (XRP-USD) was at one point 9.2% higher on Monday morning but soon retreated to a gain of 1.2%.
Over the weekend, alarm bells sounded in crypto markets following reports that the US Treasury was planning to censure financial institutions for money laundering carried out through digital assets.
Meanwhile, data website CoinMarketCap cited a blackout in China’s Xinjiang region for the price falls. The region allegedly powers most bitcoin mining — the process by which new bitcoins are entered into circulation.
Watch: What is bitcoin?
Over the past week, the joke token has rocketed as much as 550%. The rally has pushed it beyond the value of several major banks on Friday, including Barclays (BARC.L) and Lloyds Banking Group (LLOYD.L). Dogecoin was ranked among the tenth largest cryptocurrency in the world.
The volatility in crypto comes days after bitcoin approached $65,000 ahead of the listing of cryptocurrency trading platform Coinbase. Coinbase last week became the first major crypto firm to list on the Nasdaq (^IXIC).
Although trending higher, bitcoin has been volatile over the last few months as governments and regulators have focused in on the sector.
“The majority of crypto firms want to make sure that their compliance process is top-notch because they have seen a clear road map of success, which is laid by Coinbase,” said Naeem Aslam, chief market analyst at Avatrade.
“By being compliant, they are likely to attract more capital and promote new technologies. Another fact is that institutional buying power is still much bigger than retail money, and we have only seen a small fraction of that money.”
Earlier in 2021, the market value of all bitcoin in circulation hit $1tn for the first time, after a more than 800% surge. In December, it soared past Visa (V) to become the world’s largest financial service.
Other signs of rising mainstream acceptance include JPMorgan (JPM) decision to start banking Coinbase and the Gemini platforms, and Visa and Mastercard’s decisions to provide services to crypto companies.
Watch: What are the risks of investing in cryptocurrency?