Bitcoin dropped more than 10 percent to $7,334.93 on Monday morning, according to CoinDesk's bitcoin price index, which tracks prices from exchanges Bitstamp, Coinbase, itBit and Bitfinex. That marked bitcoin's lowest since mid-November.
Bitcoin 12-month performance
On Tuesday, Facebook also banned ads for cryptocurrencies.
Meanwhile, worries about a regulatory crackdown are growing. The U.S. Securities and Exchange Commission has stepped up its efforts to halt cryptocurrency-related fraud, while authorities in South Korea have banned anonymous trading accounts in an effort to limit speculation. Japanese regulators are inspecting local cryptocurrency exchanges after Coincheck lost the equivalent of more than $500 million in digital currency to hackers in January.
The heads of the SEC and CFTC are set to testify before the Senate Banking Committee on Tuesday.
In India, the country's minister of finance, Arun Jaitley, said in a speech Thursday that the government "does not consider cryptocurrencies legal tender or coin and will take all measures to eliminate use of these cryptoassets in financing illegitimate activities or as part of the payment system," according to a transcript from the daily newspaper The Hindu.
"Short term regulatory scrutiny may be a set-back to crypto prices, but long term professional investors need better regulation and more clear guidance regarding the crypto space," Gabor Gurbacs, director, digital assets strategy at VanEck, said. "The more regulators understand the markets, the higher the probability for regulated products, such as ETFs."
The cryptocurrency had skyrocketed 2,000 percent to above $19,000 in just 12 months, fueled by a surge of investor interest and speculation of increased participation from institutions. The peak came just as CME, the world's largest futures exchange, launched bitcoin futures. Its competitor Cboe launched its own product a week earlier.
Many digital currency enthusiasts expected that the launch of futures by the two major exchanges would pave the way for a bitcoin exchange-traded fund, which would likely bring even more institutional funds into cryptocurrencies.
However, after a race to file for a bitcoin ETF in late December, many of the companies withdrew their applications in early January. The SEC cited concerns about liquidity, volatility and investor protection.
Ryan Schoen, senior financial services policy analyst at research firm Washington Analysis, said he thought six months ago that a bitcoin futures-based ETF would likely launch in the first quarter of 2018.
Now, "if you've got regulators that are concerned about Bitfinex, market manipulation, you could say goodbye" to that idea, he said.
As for retail investor participation, Square did announce last week that is allowing most customers to buy and sell bitcoin using its Cash payments app. Stock trading app Robinhood is also rolling out bitcoin and ethereum trading this month for customers in five states.
But the ban on purchases from major credit card companies will make it more difficult to buy bitcoin.