Bitcoin was trading below $42,000 early on Wednesday morning. This follows a day in which most cryptocurrencies traded lower as bond yields rose, which also impacted equities.
Bitcoin is down more than 8% month-to-date and is off more than 37% from its November all-time high.
Investors have pulled money out of cryptocurrency funds for a fifth straight week, reflecting the bearish market mood as bitcoin suffered one of its worst-ever starts to a year, according to Coindesk.
A top banking executive said this week that regulators need to provide more clarity on the rules of the road for cryptocurrencies and other digital assets.
"We're hoping for more clarity around digital assets," Emily Portney, chief financial officer for Bank of New (BNY) York Mellon Corp, told Reuters in an interview.
"Frankly, it's a bit confusing about who actually regulates digital assets and especially crypto … and of course exactly what you can or cannot do," said Portney.
The comments highlight the frustration among banking industry executives as President Biden's regulators have taken a cautious approach to digital assets.
Banks want to enter the industry, but before launching products, they want clearer rules.
BNY Mellon announced in February it was developing a custody and administration platform for digital assets.
In other cryptocurrency news, Britain is cracking down on "misleading" advertisements for cryptoassets, according to Reuters.
Those ads reportedly target retail consumers with poor knowledge of the risks, according to the finance ministry.
The growing interest in cryptocurrencies has led to an increase in advertising, prompting warnings from Bank of England that investors they could lose all their money.
The finance ministry said that about 2.3 million people in Britain now own a crypto asset, but research suggests that understanding of the sector is declining.
Advertising of cryptoassets will be brought within the scope of existing financial promotions legislation, the ministry said.