Bitcoin hovers above $40,000 after a wild week that saw the cryptocurrency plunge 30% at one point

Bitcoin’s price hovered above the $40,000 level on Friday, as a comeback for the world’s top cryptocurrency was checked by worries around regulation.

The digital coin was up 1.7% at a price of $40,841 by 6 a.m. ET, according to Coin Metrics data. It bounced above the $42,000 mark Thursday as digital currencies attempted to rebound from a brutal sell-off earlier in the week.

Other cryptocurrencies were in the red Friday, with ether down 2.2% at $2,741, XRP off by 4.6% at $1.13 and litecoin falling 2.4% to $206. Dogecoin, a meme-inspired crypto supported by Tesla CEO Elon Musk, was down 2.6% at 39 cents.

Bitcoin’s gains were capped Friday after the U.S. Treasury Department said a day earlier that it would require any cryptocurrency transfer worth $10,000 or more to be reported to the Internal Revenue Service.

“Cryptocurrency already poses a significant detection problem by facilitating illegal activity broadly including tax evasion,” the Treasury said.

It’s the latest sign of an impending regulatory crackdown on cryptocurrencies. Earlier this week, China issued a warning reiterating its stance that financial institutions and payment firms are forbidden from providing crypto-related services.

Bitcoin and other cryptocurrencies slid as much as 30% on Wednesday, as investors reacted to the statement from China as well as mixed signals from Tesla CEO Elon Musk.

Musk came out as a supporter of bitcoin earlier this year, with Tesla buying $1.5 billion worth of the cryptocurrency and briefly accepting it as a means of payment. However, he halted the purchase of Tesla vehicles with bitcoin last week, citing concerns over bitcoin’s huge energy consumption.

Critics have long warned about bitcoin’s environmental impact. The cryptocurrency uses as much electricity as entire countries like the United Arab Emirates and Pakistan, according to Cambridge University researchers.

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