Cryptocurrency prices reel after wild weekend of selling

Lucy Harley-McKeown
·3-min read
PARIS, FRANCE - APRIL 14: In this photo illustration, a visual representation of the digital Cryptocurrency, Bitcoin is on display in front of the Bitcoin course's graph on April 14, 2021 in Paris, France. The value of Bitcoin (BTC) has exceeded the threshold of 64,000 dollars for the first time in history. The Cryptocurrency overtakes the British Pound to become the 6th largest currency in the world. The total bitcoin market now represents $ 1.2 trillion, while that of all cryptocurrencies stands at $ 2251 billion. (Photo illustration by Chesnot/Getty Images)
Bitcoin's potential institutional adoption has been a hot topic in markets. Photo: Chesnot/Getty Images

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.

By the end of Sunday, bitcoin had fallen by 9%. Ethereum was down 13%. 

Watch: What is bitcoin?

READ MORE: The history of dogecoin, the joke currency that's worth more than Barclays and Lloyds

Elsewhere on Monday, Dogecoin (DOGE-USD) was up 22.8% but still below all-time highs seen last week. The cryptocurrency was trading at $0.3465.

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.

Dogecoin's one-month look. Chart: Yahoo Finance UK
Dogecoin's one-month look. Chart: Yahoo Finance UK

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.

On Friday, bitcoin plunged 4% after the Central Bank of Turkey banned the use of cryptocurrencies and other digital assets for payments.

Bitcoin's ascent. One-year chart. Chart: Yahoo Finance UK
Bitcoin's ascent. One-year chart. Chart: Yahoo Finance UK

"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.

READ MORE: Bitcoin and crypto markets crash on US crackdown reports

In October last year, Bitcoin got a big boost in sentiment after California-based payments platform PayPal (PYPL) said it would allow customers to hold the cryptocurrency in their digital wallets.

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?