Bitcoin fell more than 2% against the US dollar around midday Monday, trading around $55,230 per coin.
The weekend plunge was a rather dramatic end to a months-long rally that was topped off by Coinbase’s enormous IPO last week, which valued the cyrpto exchange at nearly $100 billion. Coinbase shares opened lower Monday, and traded 1.8% lower around midday.
Bitcoin had tumbled because of “some countries like Turkey making noise about banning Bitcoin as a payment methodology and also talk of further scrutiny by the US Treasury,” said Brad Bechtel, global head of FX at Jefferies.
The crypto market is also getting more crowded: China is creating a digital yuan and is toying with the idea of rolling out the currency at the 2022 Beijing Winter Olympics. Meanwhile, the Bank of England announced the creation of a Central Bank Digital Currency as well as a task force to explore its uses.
“Big Tech is also developing their own versions of cryptocurrencies,” said analysts at Action Economics in a note to clients. “All this represents significant future competition for the likes of bitcoin.”
At the same time, the cryptocurrency still has plenty of bullish backers.
“We don’t think any of these factors change the fundamental story for Bitcoin which still seems supported by constrained supply and broadening institutional and retail investor adoption,” wrote Win Thin, global head of currency strategy at Brown
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