Bitcoin briefly falls below $6,000 ahead of Senate hearing

Bitcoin is on a rollercoaster ride.

The cryptocurrency tumbled as much as 13% Tuesday. Bitcoin briefly fell below $6,000 for the first time in three months before recovering most of its earlier losses. It has lost nearly two-thirds of its value since it peaked above $19,000 in December.

Other digital currencies, including ethereum, litecoin and ripple, mirrored bitcoin's drop.

Stocks took a beating on Monday. The Dow plunged almost 1,600 points, the biggest point decline in history during a trading day.

"Crypto is just as much a part of this [selloff] as everything else in the world," Mati Greenspan, a Tel Aviv-based analyst at investment firm eToro, wrote in a note to clients Tuesday.

Bitcoin's volatility comes ahead of a Senate Banking Committee hearing on cryptocurrencies. Securities and Exchange Commission Chairman Jay Clayton and Commodity Futures Trading Commission Chairman J. Christopher Giancarlo are scheduled to testify.

In prepared remarks, Clayton highlighted weaknesses in digital currencies' regulation.

"The currently applicable regulatory framework for cryptocurrency trading was not designed with trading of the type we are witnessing in mind," Clayton said.

The SEC has already stepped up enforcement. Last week, it obtained a court order halting an initial coin offering from what claimed to be the world's first "decentralized bank."

Cryptocurrency investors have also been alarmed by sharpened rhetoric around online currencies.

On Tuesday, Switzerland-based Bank for International Settlements General Manager Agustin Carstens called bitcoin a "combination of a bubble, a Ponzi scheme and an environmental disaster."

Carstens' comments followed scrutiny Monday from Mario Draghi, president of the European Central Bank. Draghi said online currencies were "very risky assets" and that prices were "entirely speculative."