As investors hurried to take profits, bitcoin dropped as much as 9% on Monday after reaching a record high over the weekend. Crypto investors are also contemplating the consequences of a Reuters statement that India will introduce a law prohibiting the selling or keeping of cryptocurrencies, with penalties levied on anyone who does so.
After the weekend's retail trader-driven rally fizzled, Bitcoin witnessed its biggest single-day price drop in more than two weeks on Monday.
On Saturday, the cryptocurrency reached a new high of $61,781.83 after US President Joe Biden signed off on his $1.9 trillion fiscal stimulus plan and ordered vaccinations to be accelerated. the world's most expensive virtual currency reached $61,781.83, up more than 40% since late February, as investors brushed off worries about sky-high valuations.
In afternoon trading, bitcoin was down 4.99% at $55,266.
Despite Monday's retracement, many investors expect bitcoin's price will continue to grow. Bitcoin has increased by more than 90% this year, outperforming conventional asset classes, thanks to mainstream companies and major investors such as Tesla Inc and Bank of NY Mellon adopting cryptocurrencies.
Despite government threats of a ban, transaction volumes are growing in India, according to industry estimates, with 8 million investors holding 100 billion rupees ($1.4 billion) in crypto assets. However, no official information is available on this.