Bitcoin along with other major cryptocurrencies such as Ethereum and XRP fell sharply, sparking fears of a market crash after it hit an all-time high of $4.2 trillion this month.
The fall came shortly after Tesla owner Elon Musk made another statement on crypto.
Bitcoin prices fell from a high of $124,000 last week to around $114,000, down about 10%.
Meanwhile, Ethereum and XRP also suffered losses, while US President Donald Trump added pressure with a shocking $12.2 trillion disclosure on the crypto market.
The decline coincided with expectations of a major change in Federal Reserve (Fed) policy followed by warnings from Wall Street giants about the recently passed Genius Stablecoin Act.
They warned that the act could trigger a withdrawal of up to $6.6 trillion in bank deposits.
US banking groups JPMorgan and Bank of America are urging Congress to block legislation that would allow creators of USD-based stablecoins to offer returns through affiliates.
They say the move could trigger a massive deposit outflow that could destabilize the banking system.
In April, the US Treasury Department reported that stablecoins could potentially trigger up to $6.6 trillion in deposit withdrawals, depending on whether they are allowed to offer interest or returns.
The stablecoin market is expected to grow from $280 billion today to $2 trillion by 2028.
