The value of bitcoin tumbled by nearly 15 per cent on Friday, down roughly 30 per cent from its record high of nearly $20,000(£14,950) set at the start of the week.
The price of the digital currency fell as low as $12,504 on Friday morning, according to CoinDesk's Bitcoin Price Index.
It has been a volatile month for the cryptocurrency which has surged in value since the start of the year.
Bitcoin hit a record high of $19,666 on Sunday in the lead up to exchange giant CME Group’s launch of its bitcoin futures and has since lost about a third of its value.
It was not immediately clear what caused the sudden fall in price.
The success of bitcoin has led to a rise in in rival cryptocurrencies and competition in the market is heating up.
Stephen Innes, head of trading in Asia-Pacific for retail FX broker Oanda in Singapore, told Reuters that there have been moves out of bitcoin into Bitcoin Cash, a clone of the original cryptocurrency.
“Most of it is unsophisticated retail traders getting burned badly,” Innes said on bitcoin’s recent retreat.