A smartphone displays the Bitcoin GBP market value on the stock exchange via the Yahoo Finance app.

Bitcoin nosedived Wednesday as Congress members highlighted the downsides of cryptocurrency on Capitol Hill.

The world's largest digital currency fell as much as 9% to a low of $7,435.26 Wednesday. That marked bitcoin's lowest level since June.

The plunge came as Facebook CEO Mark Zuckerberg appeared before the House Financial Services Committee to defend plans for a new cryptocurrency, libra. Zuckerberg's testimony follows a July congressional hearing with David Marcus, the former PayPal executive in charge of Facebook's libra project, in which lawmakers blasted the project and potential for cryptocurrencies to be used for money laundering and terrorism.

"Today's selloff is a continuation of the themes that have been plaguing crypto for the past few months — increased regulatory scrutiny," said Jeff Dorman, chief investment officer at Arca. Dorman said a "lack of positive catalysts" coupled with low trading volumes have exacerbated the moves lower.

While some analysts say Facebook's involvement put crypto on the map, it has also brought new scrutiny to the fledgling technology. Rep. Brad Sherman, D-Calif., was among those from both political parties Wednesday who highlighted libra's potential use by drug dealers, tax evaders and terrorists.

"Cryptocurrency either doesn't work, in which case investors lose a lot of money, or it does achieve its objectives, and displaces the U.S. dollar as the sole reserve currency in the world," Sherman said during the hearing. "You're going to be making powerful burglary tools and letting your business partners commit the burglary."