Bitcoin, the digital currency, lost more than $160 (£104) in value on Wednesday, just hours after hitting a record high.
The currency hit a new high of $266 before falling to $105 and then bouncing back to $130. The fall is unlikely to put off speculators. Two months ago, a Bitcoin was worth $20.
With Europe racked by economic uncertainty following the banking crisis in Cyprus, there have been fears that a "bubble" is being created with speculators piling into the four-year-old digital currency. But Bitcoin has crashed before only to bounce back. It hit a low of $7 in August 2011 after hitting a high of $32 two months earlier.
Jon Matonis of the Bitcoin Foundation, the currency's promoter, denied a euro-bubble was being created in an interview with Der Spiegel this week. "Most transactions are still coming from affluent regions, like the United States and northern Europe. What we are seeing is not a Cyprus bubble," he said.
Until recently Bitcoin had been a largely obscure currency used by the tech-savvy, libertarians wishing to thumb their noses at central bankers and people involved in more nefarious activities such as online gambling (often illegal in the US) or drug deals.