New York (CNN Business)It has been a turbulent week for Bitcoin — and it’s only Monday. After the cryptocurrency suffered a flash crash on Saturday — plummeting some 14% — it attempted to bounce back Monday. But the rebound is already fizzling out.
Bitcoin rose fell 0.4% against the US dollar early Monday, hovering above the $56,000 mark.
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 1.3% lower around mid-morning.
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 Brothers Harriman, in a note.
The US dollar index also fell Monday, with the greenback dropping 0.5% against a basket of its rivals.
Elsewhere in the market, stocks are flashing red following last week’s string of record highs for the Dow (INDU) and the S&P 500 (SPX).
The Dow fell 0.3%, or 105 points, around mid-morning. The S&P also slipped 0.3%, and the Nasdaq Composite (COMP) traded 0.7% lower.
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