The digital currency peaked at a value of $1,130 just over a year ago. Its plunge of more than 56 percent in 2014 makes it the world's worst performing currency this year.

MOSCOW, December 25 (Sputnik) – The digital currency Bitcoin has been named the world's worst currency, falling by more than 56 percent in 2014, Bloomberg said.

"The digital currency peaked at a value of $1,130 just over a year ago. Its plunge of more than 56 percent in 2014 makes it the world's worst performing currency this year," Bloomberg editorial board member Mark Gilbert said.

The Ukrainian hryvnia was given second place in the world's worst currency rating. War-torn Ukraine would need extra $15 billion in addition to the International Monetary Fund's bailout worth $17 billion in order to recover from its current economic crisis, Gilbert argues.

The Russian ruble was named the third worst currency of 2014. Gilbert suggested that the ruble's poor performance this year was linked to Western sanctions imposed on Russia over its alleged involvement in the Ukrainian crisis.

Gilbert argued that people showed less confidence in the digital Bitcoin than in traditional currencies, because "minor things, like being backed by a country or countries, being minted by a government, and having a physical form you can put in your pocket, still matter."

Bitcoin is a decentralized digital currency that was introduced in 2009. The currency was proposed by Satoshi Nakamoto with the aim of creating a currency independent from any government and easily transferred electronically with low transaction fees. The current value of 1 Bitcoin is about $326, according to Bloomberg.

Bitcoin transactions are restricted in a number of countries, including China, Russia and India.