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Bitcoin is trading nearly 40% below its record price of $64,000 following a sudden crash sparked by regulatory moves in China. Ethereum is down more than 35% from its all-time high, and dogecoin is off more than 45%.
Investors expect cryptocurrencies to be volatile. But the severity and breadth of the pullback has traders worried about a potential bubble, and observers are asking tough questions about whether coins are good stores of value.
The crash follows heightened interest from institutional investors in crypto assets, a trend highlighted by Tesla’s decision to purchase $1.5 billion worth of bitcoin. Adoption by other big corporates and investors may now slow.
But the week also provided two major announcements from the US government that could, over time, help to mainstream cryptocurrencies, and address some problems commonly associated with digital coins.
Bitcoin bounces back but the crypto turmoil isn't over
The first major announcement was from the US Treasury, which called for crypto transfers worth more than $10,000 to be reported to the Internal Revenue Service.
“As with cash transactions,