The 14pc collapse in Bitcoin’s price on Monday means that it has now lost three quarters of its value in less than a year. It came amid a continued sell-off of technology shares on Wall Street, with Apple, Facebook and Amazon among those dropping heavily.
Bitcoin has been falling since the start of the year and is famously volatile, but it has now dropped by more than 20pc in the last week. On Monday it fell as low as $4,709 (£3,658), the lowest point since May 2017.
The recent fall has been accompanied by a row over Bitcoin Cash, a rival cryptocurrency created last year. Last week, Bitcoin Cash split its code into two, creating competing versions of the cryptocurrency.
The two versions of Bitcoin Cash, known as ABC and SV, have competed against one another for supremacy by seeking to attract the most computing power. This arms race may have drained computing resources away from Bitcoin itself, thus reducing the perceived demand for the original cryptocurrency.
Separately, the chipmaker Nvidia last week warned of a drop in demand for
the graphics cards commonly used to mine cryptocurrencies.
Bitcoin has now fallen for eight consecutive days, the longest slide on record. Rivals such as ethereum, the second most popular cryptocurrency, have also declined in value.
According to CoinMarketCap, a website that tracks digital currency valuations, the combined value of all cryptocurrencies has fallen from $824bn at the start of January to $162bn.
The drop came as US technology stocks continued to suffer big declines. Apple fell by 4pc on Monday amid reports that it has slashed orders for its latest iPhones amid weaker-than-expected demand.
Companies particularly exposed to cryptocurrencies fell further. Nvidia declined by 12pc, while Square, the payments company that allows users to buy and sell Bitcoin, fell by 10.8pc.