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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.
During a Senate hearing on Tuesday Janet Yellen, Biden's pick to
head the U.S. Treasury, expressed concerns that cryptocurrencies
could be used to finance illegal activities.
"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."
(Reporting by Julien Ponthus and Tom Wilson; Editing by David
Goodman)
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