After a hype-filled week for cryptocurrencies, Bitcoin experienced a flash crash over the weekend, plunging nearly 14% in less than an hour, from about US$59,000 to $51,000, on Saturday night before rebounding. Other popular cryptocurrencies including etherium and Dogecoin also fell dramatically, before recouping some of their losses.
Bitcoin has skyrocketed in value this year as it gained more mainstream acceptance, but the sharp price fall this weekend seems to have been triggered by an unconfirmed Twitter rumor that the U.S. Treasury was planning to crack down on money laundering schemes involving cryptocurrencies. The agency did not immediately respond to a request for comment on Sunday.
Bitcoin’s rapid overnight plunge is the latest indicator that the crypto market remains wildly volatile.
Last week crypto enthusiasm seemed to reach a peak as trading platform Coinbase went public at a valuation of $86 billion, followed by a wild 500% rally in Dogecoin — an asset that was created as a joke in 2013. Cryptocurrency backers have spent years insisting that bitcoin, ethereum and other digital coins could revolutionize the world of finance, and with the success of Coinbase’s Wall Street debut Wednesday, those backers are finally having their moment.
Tesla has started accepting bitcoin payments for its cars and now holds some of the digital currency on its balance sheet. Payment processors including PayPal, Mastercard and Visa are trying to streamline crypto payments on their networks. Meanwhile, Goldman Sachs will reportedly soon offer its private wealth management clients avenues to invest in bitcoin and other digital currencies and Morgan Stanley announced that it will offer its wealthy clients access to bitcoin funds.
CNN’s Julia Horowitz contributed to this report.
