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Bitcoin is up eight% because the cryptocurrency market seeks a comeback after final week's hunch

The price of the Bitcoin virtual cryptocurrency is shown in this photo on a phone screen.

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LONDON – Bitcoin prices rose again on Monday as the cryptocurrency market tried to recover from a wide sell-off last week.

Around 3 p.m. London time, the price of the world's most valuable digital currency rose more than 8% to $ 53,757 per coin, according to Coin Metrics. Two smaller digital tokens, Ether and XRP, rose 9% and 15%, respectively.

Last week, Bitcoin fell below $ 50,000 for the first time since early March after a planned hike in capital gains tax by US President Joe Biden led to a sell-off. The entire crypto market lost more than $ 200 billion in value in a single day.

Biden is expected to increase the long-term capital gains tax, including a surcharge, to 43.4% for the richest Americans. This sparked a brief decline in stock markets, and analysts said fears about the proposal may have spread to the crypto market.

Bitcoin is up around 80% since the start of the year as more institutional investors and large corporations like Tesla have entered the market, believing that in the event of rising inflation, it will be a portfolio diversifier. However, it's down around 17% from an all-time high of nearly $ 65,000.

In the past few weeks, crypto managers have warned of a possible market entry by regulators. Several officials, from US Treasury Secretary Janet Yellen to European Central Bank President Christine Lagarde, have raised the alarm about the use of Bitcoin in illegal activities.

In Turkey, the central bank banned the use of digital assets for payments while two crypto exchanges collapsed. One of the company's CEO, Thodex, has reportedly fled Turkey with $ 2 billion in investor money.

Still, there are signs that crypto is entering the mainstream. Coinbase, the largest digital money exchange in the US, went public earlier this month in a blockbuster direct listing, while PayPal rolled out new features for trading crypto and using it for shopping.

On Monday, the crypto industry publication, CoinDesk, reported that JPMorgan was preparing to offer an actively managed bitcoin fund to its retail clients.

JPMorgan wasn't immediately available for comment when CNBC reached out.

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