Bitcoin and other major cryptocurrencies are crashing in a sudden and dramatic market collapse.

After weeks of steady gains, bitcoin dropped in price by more than $300 in the space of an hour on Wednesday morning, with ethereum, ripple and bitcoin cash all following its lead. By Thursday morning, bitcoin had fallen $1,000 in just 24 hours.

The reason for the sudden price crash was not immediately obvious, though some analysts have said panic selling could contribute to bitcoin's fall in value.

Other factors potentially contributing to the crash include a report that Goldman Sachs is dropping plans for a cryptocurrency trading desk.

Bitcoin's volatile history in pictures Show all 8 1 /8 Bitcoin's volatile history in pictures Bitcoin's volatile history in pictures Satoshi Nakamoto creates the first bitcoin block in 2009 On 3 January, 2009, the genesis block of bitcoin appeared. It came less than a year after the pseudonymous creator Satoshi Nakamoto detailed the cryptocurrency in a paper titled 'Bitcoin: A peer-to-Peer Electronic Cash System' Reuters Bitcoin's volatile history in pictures Bitcoin is used as a currency for the first time On 22 May, 2010, the first ever real-world bitcoin transaction took place. Lazlo Hanyecz bought two pizzas for 10,000 bitcoins – the equivalent of $90 million at today's prices Lazlo Hanyecz Bitcoin's volatile history in pictures Silk Road opens for business Bitcoin soon gained notoriety for its use on the dark web. The Silk Road marketplace, established in 2011, was the first of hundreds of sites to offer illegal drugs and services in exchange for bitcoin Bitcoin's volatile history in pictures The first bitcoin ATM appears On 29 October, 2013, the first ever bitcoin ATM was installed in a coffee shop in Vancouver, Canada. The machine allowed people to exchange bitcoins for cash REUTERS/Dimitris Michalakis Bitcoin's volatile history in pictures The fall of MtGox The world's biggest bitcoin exchange, MtGox, filed for bankruptcy in February 2014 after losing almost 750,000 of its customers bitcoins. At the time, this was around 7 per cent of all bitcoins and the market inevitably crashed Getty Images Bitcoin's volatile history in pictures Would the real Satoshi Nakamoto please stand up In 2015, Australian police raided the home of Craig Wright after the entrepreneur claimed he was Satoshi Nakamoto. He later rescinded the claim Getty Images Bitcoin's volatile history in pictures Bitcoin's big split On 1 August, 2017, an unresolvable dispute within the bitcoin community saw the network split. The fork of bitcoin's underlying blockchain technology spawned a new cryptocurrency: Bitcoin cash REUTERS Bitcoin's volatile history in pictures Bitcoin's price sky rockets Towards the end of 2017, the price of bitcoin surged to almost $20,000. This represented a 1,300 per cent increase from its price at the start of the year Reuters

While bitcoin fell by around 12 per cent, the hardest hit by the market shift has been ethereum, ripple, bitcoin cash and EOS, which all dropped by around 20 per cent.

Bitcoin hit a one-month high on Tuesday, leading some experts to suggest that more price gains can be expected.

"The increased price stability of Bitcoin over the last couple of days has not been witnessed for a while and I think it should be viewed as a positive sign with more gains to come, especially in the coming months," blockchain investor and advisor Oliver Isaacs told The Independent when asked about the cryptocurrency's prospects just hours before the crash.

The price of bitcoin plummeted by several hundred dollars on Wednesday morning, triggering a market-wide crash for cryptocurrencies (CoinMarketCap)

However other analysts were quick to say that cryptocurrency investors should be careful about seeing recent gains as a sign of things to come, at least in the short-term.

“Bitcoin’s price might be rising but it’s way too early to call this a true resurgence," said Matthew Newton, a market analyst at the online trading platform eToro. "We’ve seen the price yo-yo for several months so I’d be hesitant to herald this as a new dawn just yet... Traders should be cautious."

He added: "Looking ahead, there is plenty to be positive about though. There’s lots of great fundamental news about the development of cryptocurrencies right now, but that’s going to take time to filter through and impact on price."

Bitcoin is still trading higher than it was at this point last year, though it remains a long way off the highs of December 2017, when its price reached close to $20,000.

Since then, bitcoin has been on a bumpy slide down to today's price of around $7,000, though had experienced a period of relative stability in recent months.