The value of bitcoin plunged last month, amid fears that trading was about to be banned in South Korea. It then stabilised briefly, before plummeting again.
The volatile cryptocurrency hit a record high when it passed $19,850 in mid-December, but then tumbled rapidly, falling to below $12,000 within days.
Its value has shifted unpredictably ever since, with frequent wild drops and recoveries. The rapid drops are partly the result of continuing fears about regulation, as well as anxiety provoked by a series of high-profile thefts.
Its value dropped spectacularly at the start of February, falling from $10,000 to $6,000 in four days. However, it now appears to be recovering.
It is worth $8,389 as of Friday afternoon UK time, according to the Coinbase exchange.
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Its value is down less than 1 per cent from a week ago and more than 42 per cent from a month ago. But it is still up more than 730 per cent from a year ago.
The recent price drops followed reports about potential cryptocurrency regulation and trading bans.
South Korea recently is no longer allowing people to trade bitcoin and other digital currencies anonymously, but says it isn’t planning to ban cryptocurrency exchanges.
Theresa May has hinted that the UK government could introduce similar measures, and the US government is concerned about bitcoin’s popularity amongst criminals.
Recent goings-on have demonstrated just how quickly things can change for investors.
The cryptocurrency’s value plummeted ahead of Christmas, dropping by almost $2,000 in just an hour at one point, and almost slipping below the $11,000 mark. It then bounced back, before tumbling again in mid-January.
Bitcoin is notoriously volatile, and its value is expected to continue to shift unpredictably.
Its rise last year also led to increasing amounts of interest in other digital currencies, such as ethereum, litecoin and Ripple XRP, and more and more people are now looking to invest in digital currencies.
However, there are serious fears that bitcoin has created a bubble that could burst at any moment.
Numerous financial experts have advised potential investors to avoid getting involved with bitcoin, and the SEC has told people to “exercise caution” and be wary of scammers.
But others have speculated that it could eventually rise towards the $1m mark.
Bitcoin has no central bank and isn’t linked to or regulated by any state.
An anonymised record of every bitcoin transaction is stored on a huge public ledger known as a blockchain.
However, transactions made with the cryptocurrency are irreversible, which makes investors in bitcoin attractive targets for cybercriminals.
This article is being regularly updated to reflect bitcoin’s latest value.
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