Bitcoin dropped below $12,000 this morning, falling as low as $11,182 to a four-week low as the notoriously volatile digital currency shed nearly $1,000 in just an hour.
At the time of writing, the price of bitcoin was down 14.14 per cent at $11,911.5 a coin according to Coinmarketcap. Rival cryptocurrency ethereum also dropped 20 per cent to $1,056.38 while Ripple tumbled more than 25 per cent to $1.36.
Bitcoin stole headlines throughout 2017 as it made a stunning rise from around $1,000 at the start of the year to highs of nearly $20,000 in December. However, over the holiday period the cryptocurrency dropped back down to earth. Since then, bitcoin has mostly traded between a range of about $13,000 to $15,000.
As bitcoin gained notoriety over 2017, it also drew more scrutiny. Last week it was hit hard when South Korea announced plans to outlaw trading in cryptocurrencies.
South Korean news website Yonhap today reported that the country's finance minister had told a local radio station that the government would be coming up with a set of measures to clamp down on the “irrational” cryptocurrency investment craze, according to Reuters.
"Explaining moves in bitcoin is always tricky but this plunge back to the December 22nd low may well be a result of recent signs that regulatory pressures are building," said Neil Wilson, senior market analyst at ETX Capital.
"Bitcoin faces a regulatory crunch sooner or later and increasingly we see signs of this starting to bite following South Korea’s tentative plans to ban trading on cryptocurrencies and China’s move to shutter mines. Latest developments suggest more regulatory pressures," he said.
"Meanwhile there may be growing consensus among European regulators to act in concert. We note that the Bundesbank has called for a global regulation for bitcoin, while France’s finance minister is seeking to draft tougher rules for cryptocurrencies.”
Legendary investor Warren Buffett has also recently warned against it, saying bitcoin would "come to a bad ending".