The world’s most popular cryptocurrency Bitcoin was last down 7.5% at $32,779 after falling as low as $31,977. It has lost nearly a quarter since touching a record $42,000 on Jan. 8.
The pullback comes amid growing concerns that bitcoin is one of a number of financial market price bubbles.
Fears that U.S. President Joe Biden‘s administration could attempt to regulate cryptocurrencies have also weighed on sentiment, traders said.
“I think many are used, at least in a transactions sense, mainly for illicit financing, and I think we really need to examine ways in which we can curtail their use and make sure that money laundering does not occur through these channels,” said the former chair of the U.S. Federal Reserve.
Joseph Edwards of cryptocurrency broker Enigma Securities said these comments had a substantial impact.
“The action over the last 36 hours or so has largely been rippling outwards from the Janet Yellen comments on crypto,” he said, adding that it was still unclear exactly what, if any, moves the Biden administration would take.
“We do think it’s probably still just a lapse in momentum rather than a sea change, though.”