Bitcoin plummeted overnight and with a fresh fall shortly after 7am prices fell as low as $12,500.
The cryptocurrency has lost around a third of its value since hitting all-time highs of almost $20,000 earlier this week.
Bitcoin slumped to $13,078 shortly after 3am, according to Coindesk, before regaining ground. Then in a fresh dive at 7.20am, prices hit $12,504.
Read more: "Shun bitcoin, bite at blockchain" says UBS
“Keep in mind that bitcoin has gone up a lot this year, so a correction is always likely,” ASR Wealth equities and derivatives trader Shane Chanel told Reuters.
Monex chief strategist Takashi Hiroki added: “Trading in bitcoin is akin to gambling, so its movements don’t follow logical patterns.
Unlike equities and bonds, it is not possible to calculate expected returns on bitcoin, so buying it becomes a gamble rather than an investment.
Yesterday, Swiss investment banking giant UBS slammed bitcoin, saying it was not "a viable investment".
"We believe this has all the hallmarks of a bubble. High turnover, against limited real-world use, suggests that many buyers are seeking speculative gain. And while the supply of bitcoins is limited, the broader stock of cryptocurrencies is not, with thousands of potential substitutes," UBS wrote.
UBS did say it saw opportunities in the blockchain technology that underpins cryptocurrencies.