Its price hit the highest level of $20,000 mark on December 17.
Many financial pros believe bitcoin is in a speculative bubble that could crash any time. It fell 26 percent in a week after reaching its peak in mid-December, only to rally 21 percent in the next 10 days. "This massive, global traffic pushes prices back up". South Korea has since dispelled any rumors of an outright ban of cryptocurrency, but the damage to the market had already been done.
Cryptocurrency exchanges allow customers to trade digital currencies for other assets or different digital currencies.
For more Bitcoin news: Did Bitcoin Just Burst? "And they say that's a good thing". "A large percentage of investors were expecting this correction and reversion to mean".
The drama Wednesday was sparked by increased scrutiny from regulators around the world that spread across the digital-coin realm in recent days, wiping out more than $300 billion in value just since January 13.
"Twenty years ago, the technology stocks and new Internet stocks achieved an excess valuation of $7 trillion because of speculation", said David Kotok, chairman and chief investment officer of Cumberland Advisors.
The declines are likely to be particularly painful for people who took out debt to buy virtual currencies at high prices. When they collapsed, investors. they got very hurt.
Bitcoin is the world's best-known cryptocurrency.
There have been nine instances including the current selloff going back to 2011 where bitcoin's price was halved on the Bitstamp exchange, Reuters noted.
The market sentiment may have been boosted by news that the Cboe Global Markets, which last month became the first U.S. exchange to offer Bitcoin futures, is looking at possibly expanding its portfolio with futures on other cryptocurrencies.
In January 2017, one bitcoin was worth around $1,000. Bitcoin ended the year with a 15x increase in value.
Sociologists say the respondents have poor knowledge about bitcoins.
Every one of the top 20 digital currencies suffered double-digit losses on Tuesday.
Economists aren't so sure.
Cryptocurrencies like Ethereum, Monero, Ripple, and Litecoin all plummeted in value - with most falling more than Bitcoin before recovering.
On Dec. 9, Ars Technica's Lee had an uncertain prediction for the future of the cryptocurrency. Some 27% think that not everyone can buy this cryptocurrency, and another 16% say it is outlawed in Russian Federation.
Many people who jumped into virtual currency trading market more recently are suffering financially just as the government proposes measures at regulation.
Liam Elliot, a sophomore political science student, thinks Bitcoin will crash.
Asia Simone Burns is an intern with NPR Digital News. "But I don't know how much - you know, how far down it will decline".
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