Bitcoin (BTC-USD) was in retreat on Monday morning after hitting a new record high over the weekend.
It broke through $60,000 to reach a high of $61,674 on Saturday. The world’s biggest cryptocurrency was in retreat by the start of the week, down 6% to $56,366 by lunchtime in London.
The price decline came amid reports that India could ban cryptocurrencies altogether, potentially cutting off one of the biggest markets in the world.
Reuters reported on Sunday evening that senior government officials in India were working on a law banning cryptocurrencies. People could be penalised for mining or owning cryptocurrencies under the proposals, according to the report.
The broader cryptocurrency ecosystem was in decline on Monday morning. The crypto market was down 4.5% over 24 hours, according to CoinMarketCap.com. Ethereum (ETH-USD), the world’s second largest cryptocurrency, was trading 5.2% lower against the dollar to $1,777.37 on Monday.
Nigel Green, chief executive and founder of financial advisory group deVere, said regulation was likely to become an increasing concern for bitcoin and the wider cryptocurrency market.
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“Whether crypto cynics like it or not, there’s no getting away from the fact that bitcoin is becoming an increasingly important part of the global financial system,” he said.
“The move towards digital currencies is going to increase – and at pace – over the next few years. This is why financial regulators must now make regulation of the crypto sector a major priority.
“With a growing dominance, bitcoin and other cryptocurrencies must be held to the same standards as the rest of the financial system with a robust, workable international framework.”
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While the cryptocurrencies were under pressure on Monday morning, the market is still far higher than it was six months ago. Bitcoin has rallied over 400% amid a surge of interest from institutional players like Square (SQ) and Tesla (TSLA). The surge has helped spark a broader rally for the market.
“While the bitcoin flow picture was dominated by institutional investors during Q4 2020, the flow picture has been more equally balanced between retail and institutional investors in the current quarter,” analysts at JP Morgan said in a note on Friday.