The price of Bitcoin had fallen more than 11%, to around $9,590, by the end of a Senate Banking Committee hearing on Libra Tuesday morning. This is the first time in two weeks Bitcoin has dropped below $10,000.
Other cryptocurrencies fell Tuesday, as well. Ether, another major crypto, is down almost 12%, with the bulk of its drop coming during the hearing.
Bitcoin has been on a rally for several months, which many attributed to Facebook’s development of a cryptocurrency lending legitimacy to the market.
But in the month since Libra was announced, regulators around the world have been sounding the alarm about risks to consumer privacy, the power of central banks and global financial markets that they say Facebook’s proposal presents. They’ve been more worried about Libra than existing cryptocurrencies because Facebook’s 2.4 billion users could cause a rapid buy-in to the largely unregulated cryptocurrency market. Now, lawmakers in the United States are calling for increased or clarified regulations for the cryptocurrency market as a whole.
“The Libra announcement has heightened the need for policymakers and regulators to establish clear rules of the road,” Banking Committee Chairman Mike Crapo said Tuesday.
Many cryptocurrency experts, though, say clearer regulations in the United States could actually help the market and encourage more innovation. Bill Shihara, CEO of blockchain trading platform Bittrex, said his company and others spend hundreds of thousands of dollars trying to parse how a hodgepodge of state and federal financial regulations apply to digital currencies.
“What I like about what’s happening with these Facebook hearings is it’s forcing regulators to provide certainty for us,” Shihara said. “That’s going to help the United States compete in the blockchain sector.”
Bitcoin’s price may continue to falter this week as Libra faces another hearing before the House Financial Services Committee on Wednesday.