Bitcoin fell as low as $9,000 after losing more than a fifth of its value having hit an all-time high of $11,395 on Wednesday.

The cryptocurrency dropped 8 per cent amid a rollercoaster ride on Thursday to hit $9,000 - a fall of more than $2,000 in under 24 hours. In volatile trading, it then picked up to around $9,500.

A number of bitcoin exchanges have experienced outages in the last week as they have failed to keep up with demand. Coinbase said it was adding around 50,000 new users per day.

Despite the latest fall, bitcoin is still up almost 900 per cent this year as speculation mounts that the cryptocurrency could be embraced by mainstream investors.

More than 100 new cryptocurrency hedge funds have been set up in recent months and Nasdaq and CME Group have both announced plans to provide futures contracts based on bitcoin.

There were more Google searches for “bitcoin” than for “Trump” in the past week despite the fact the US president has been firmly in the spotlight over his

On Wednesday, the European Central Bank said financial institutions should speed up the introduction of instant payments, whereby money is received immediately and around the clock, to counter the allure of digital currencies such as bitcoin.

Yves Mersch, a member of the ECB’s executive board, was dismissive of these digital tokens but he urged commercial banks to provide an alternative.

“Banks need to implement instant payments as soon as possible and provide an alternative narrative to the ongoing public debate on the alleged innovation brought by virtual currency schemes,” he told an event in Rome.