The collapse of popular tokens and a drop in bitcoin values have stoked investor concern and increased pressure on Washington to act.
Sharp selloffs have occurred across financial markets, including the stock market, as interest rates have risen and recession chances have increased.
Many crypto investors, as well as prominent participants in the expanding digital asset market, have seen their assets vanish.
One bitcoin's value has dropped by 12% this week to around $29,700, its lowest level since July 2021 and less than half of its all-time high of $64,440 achieved in November.
Another prominent cryptocurrency, Ethereum, is down 24 percent this week and nearly 50 percent for the year.
"There are two major variables at work: the US Federal Reserve and other central banks are raising interest rates and withdrawing liquidity.
As a result, crucial props to valuations across all asset classes – including crypto – are being removed," stated Lil Read, senior analyst at GlobalData, in a Friday report.