Bitcoin price: Why is the cryptocurrency down today?

BITCOIN'S price has plummeted to the lowest level in around two years.

The cryptocurrency is currently worth less than half of its record value following further falls today.

Bitcoin is the world's biggest cryptocurrency, but its price has fallen to $29,386.

It has dropped from last year's record high of $68,789.63, prompted by regulatory crackdowns and bans in China and Russia, as well as concerns about inflation and interest rate rises.

Geopolitical tensions with Russia - the third largest crypto mining nation - and war in Ukraine has put pressure on prices.

The price of bitcoin hit a low of $26,401 in the past 24 hours and is currently trading at $29,386 at the time of writing as fears over rising inflation mount.

In the past eight sessions, Bitcoin has lost almost a third of its value - equal to around $13,000 - and is down more than 45 per cent so far this year.

That's below its most recent low point of $29,807 recorded in July last year. 

Bitcoin and other cryptocurrencies are extremely volatile and can go down as well as up in the blink of an eye.

Investing in cryptocurrencies is extremely risky you could end up with far less than you invested - or even lose all your money.

It is important to never invest in something you don't understand.

Cryptocurrencies are not regulated in the same way as other financial products and if something goes wrong there's no one to complain to.

What is Bitcoin?

Bitcoin is a virtual currency that was created in 2009 by an unknown computer whizz using the alias Satoshi Nakamoto.

Unlike physical currencies such as pounds, dollars or euros, which come in physical notes and coins, Bitcoin isn't printed or minted.

Instead, Bitcoin tokens are a digital-only form of payment and are created by a computer code.

Why has the Bitcoin price gone down?

The value of Bitcoin is determined by how much people are willing to exchange it for and its price has fluctuated wildly since its launch.

It's currently valued at around $$29,386 - down by more than 6% over the past 24 hours, according to CoinMarketCap.

That is a long way down from last year when the currency hit record highs of nearly $69,000, helped by El Salvador making Bitcoin legal tender and regulatory approval of a Bitcoin futures ETF in the US.

Since then, it has seen regular slumps - eventually dropping to its current price - with the latest fall reflecting global markets.

How does Bitcoin work?

To process Bitcoin transactions, a procedure called "mining" must take place, which involves a computer solving a difficult mathematical problem with a 64-digit solution.

For each problem solved, one block of Bitcoin is processed. In addition, the miner is rewarded with new Bitcoin.