Australian bitcoin investors are refusing to be spooked by the cryptocurrency's wild volatility, saying its steep drop in value was a "healthy step" in the virtual currency's brief history.

Bitcoin - the world's largest digital coin - fell below $US10,000 ($A12,500) on Wednesday, continuing its month-long slide. Bitcoin peaked in December, at nearly $US20,000 but has since dropped by 50 per cent.

Wednesday's price drop was sparked by a record sell-off after the South Korean government flagged a crackdown on cryptocurrency trading. South Korea is one of the world's biggest cryptocurrency markets.

Bitcoin is one of nearly 1400 different types of cryptocurrency. China has also recently flagged a crackdown on bitcoin trading while Australian authorities want to follow Japan's lead and regulate cryptocurrencies.