The price of bitcoin and several other major cryptocurrencies have dropped dramatically over the last 24 hours, wiping billions from their value.
Bitcoin fell by more than 10 per cent to take its price below $7,400 (£5,700) for the first time since May, with no sign of the current crash slowing down.
Ethereum, ripple, bitcoin cash and ripple all saw losses of between 5 and 15 per cent over the last day.
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Cryptocurrency analysts struggled to explain the sudden crash but said further losses should not be ruled out.
The market movement comes in stark contrast to bitcoin’s generally positive year-to-date, which has seen it rise from below $4,000 in January 2019.
Recent positive developments in the cryptocurrency space had some investors hoping that bitcoin would continue to see gains, especially after both China and the EU appeared to endorse the notion of blockchain-backed digital currency.
Last month Chinese president Xi Jinping described it as an “important breakthrough”, prompting a state-run newspaper to publish a front-page story about the success of bitcoin.
It came after years of China taking a hardline stance towards the industry and comes amid rumours that the country is preparing to launch its own cryptocurrency next year.
One possible explanation for bitcoin’s mysterious crash could be further developments in China that saw a fresh crackdown on illegal exchanges.
The country’s public endorsement of cryptocurrency seemed to fuel an increase in trading activity on illicit platforms, resulting in a response from the People’s Bank of China.
“Once it is discovered, it will be stopped immediately,” the bank stated.