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Cryptocurrency Stocks Higher After Tough Week for Bitcoin

Bitcoin pares losses on Friday, following a 13% drop during the week.
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Cryptocurrency-exposed stocks began climbing again on Friday after a brutal week for the digital asset.

Bitcoin  (BTC)  was rising 6.5% to $32,455 after dropping about 13% during the week. Earlier in the month Bitcoin hit a record $41,947.

MicroStrategy  (MSTR) - Get MicroStrategy Incorporated Report was up 5.7% to $550, after closing down 5.5% on Thursday. Bit Digital BTBT rose 6.6% to $17.43, following the previous day's 2.15% slide, while Riot Blockchain  (RIOT) - Get Riot Blockchain Inc Report advanced 14% to $22.07 after tumbling 13% on Thursday.

The total market value of all cryptocurrencies lost more than $100 billion in 48 hours, CNBC reported on Thursday.

The drop followed remarks by Janet Yellen, President Joe Biden's nominee for treasury secretary, who suggested on Tuesday that lawmakers curtail the use of cryptocurrencies such as bitcoin due concerns about its use for illegal activities.

Yellen said during a confirmation hearing that many cryptocurrencies "are used -- at least in a transaction sense -- mainly for illicit financing."

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"And I think we really need to examine ways in which we can curtail their use and make sure that money laundering doesn't occur through those channels," she said. 

Yellen also said that cryptocurrencies and other digital assets have the potential "to improve the efficiency of the financial system."

If confirmed, Yellen said she would work closely with the Federal Reserve and other federal regulators "on how to implement an effective regulatory framework for these and other fintech innovations."

In addition, bitcoin took a hit from a trade blog that suggested the existence of a double-spend, referring to the same bitcoin token being used by the same person in two different transactions.

J.P. Morgan analysts said on Thursday that bitcoin was the “least reliable hedge during periods of acute market stress.”

On Wednesday, BTIG analyst Mark Palmer upgraded PayPal  (PYPL) - Get PayPal Holdings Inc. Report to buy from neutral with a $300 price target. 

Palmer said that the company's long-term growth trajectory has steepened with the announcement that its 33 million active users would be able to buy, hold and sell bitcoin and other cryptocurrencies using their PayPal digital wallets.