Bitcoin prices declined for the fourth straight month in October, as investors' concerns about the digital currency continue to grow amid a number of adverse incidents.

During October, the bitcoin value declined by 12.8%, closing at 336.8 as on 31 October, according to the Coin Desk Bitcoin price index. The popular digital currency is trading down 1.72% at $331.02 as at 6:26 am GMT.

Bitcoin declined 19.2% in September, 17.8% in August and 9.1% in July, after rising 2.6% in June.

Bitcoin was launched in 2008 and is traded within a global network of computers. Virtual currencies are not backed by any country or central bank and can be transferred without going through banks or clearing houses, and without the associated fees.

While the support for the digital currency from merchants and other prominent people increased and more bitcoin businesses started operations during October, investors have been largely pessimistic about the future of bitcoin.

Earlier, Microsoft co-founder Bill Gates spoke in favour of the digital currency, and former SEC chairman Arthur Levitt said he would be advising bitcoin firms, BitPay and Vaurum.

Regulatory issues have been a major source of concern for investors. The currency is banned in Russia, and the Chinese government is ensuring that the bitcoin business does not get any support from banks.

In the US, the proposed rules by the New York's Department of Financial Services are expected to curtail the free-wheeling nature of the currency.

Some say that the increasing adoption of bitcoin payment option by merchants is also driving down its prices.

The merchants are constantly converting bitcoins received from payments to the US dollar, leading to panic selling in the bitcoin market, according to them.

In addition, the collapse of a number of bitcoin companies has hurt investor morale. Bitcoin Trader, a popular arbitrage service in the digital currency, earlier failed due to an alleged hacking attack.

The digital currency has been widely used on online black markets, selling drugs and other illegal services and terrorist financing. It is feared that the currency may face restrictions from regulators due to its use in anti-social activities.