Bitcoin's price dropped by more than $1,000 in just one hour on Tuesday morning amid reports that governments in China and South Korea are planning further crackdowns on the digital currency.

Bitcoin fell to a six-week low of $11,685 (£8,500), dropping from over $13,000 in the space of an hour, a near-instant 10pc fall. It has now lost 40pc of its value since its $20,000 high in mid December.

Other cryptocurrencies including Ethereum and Ripple suffered much heavier drops, losing over a fifth of their value.

The drop comes amid reports that China is preparing to escalate recent measures to discourage use of cryptocurrencies. Authorities plan to effectively shut off access to online services that allow people to trade Bitcoin by blocking wallet services and access to exchange websites, Bloomberg reported.

China has already banned domestic exchanges as well as initial coin offerings, a form of crowdfunding involving cryptocurrencies, but continues to have concerns.