Bitcoin has traded to a two month low of $7,910, according to data available from the Luxembourg-based Bitstamp exchange. Bitcoin has declined by more than 14 percent in the past 24 hours, while Ethereum, Ripple, Bitcoin Cash, and other major cryptocurrencies fell by more than 20 percent. Ethereum was up slightly on the day. Regulators say cryptocurrencies are highly speculative and unsafe investments.
Social media giant Facebook announced this week that it will ban ads promoting "financial products and services that are frequently associated with misleading or deceptive promotional practices, such as binary options, initial coin offerings and cryptocurrency". Facebook could not immediately be reached for comment. The market value of cryptocurrencies is calculated by multiplying the number of digital coins in existence by their price, although many question whether that is the right way to value them.
Retail investors have poured money into digital coins, enticed by the huge run-up in prices.
Critics of virtual currencies have called the run-up in prices a speculative bubble, but supporters of cryptocurrencies say short-term price volatility is to be expected, and the blockchain technology underpinning these assets maintains its power and value. "The government will explore use of blockchain technology proactively for ushering in digital economy".
Global regulators are set to debate how to address the risks posed by the market at the next G20 meeting in March.
Bitcoin rallied more than 1,000 percent a year ago as speculators piled in. After prices peak, the owners and early investors quickly sell as many shares as possible, while the others lose.