It hit a new record high when it passed the $19,850 mark on 17 December, but tumbled rapidly soon after, falling to below $12,000 within days.
It’s worth $14,460 as of Thursday morning UK time, according to the Coinbase exchange. That is $2,000 less than it was worth just over 24 hours ago.
Its value is up more than 40 per cent over last month and more than 1,385 per cent over the last year, but recent goings-on have demonstrated just how quickly the situation can change.
The cryptocurrency’s value fell dramatically last week, dropping by almost $2,000 in just an hour at one point, and almost slipping below the $11,000 mark on Friday.
Bitcoin is notoriously volatile, and its value is expected to continue to shift wildly.
Those fluctuations have caused problems with actually using bitcoin, with Steam recently announcing that it won’t be able to take it any moreand multiple exchanges saying the huge amounts of trading is leading to problems with actually transferring them.
Naturally, its spectacular rise has coincided with increasing amounts of interest, with more and more people now looking to invest.
It also appears to have boosted alternative cryptocurrencies, such as ethereum and litecoin, which have both seen huge gains in recent weeks.
However, there are serious fears that bitcoin has created a bubble that could burst at any moment.
Numerous financial experts are advising potential investors to avoid getting involved with bitcoin, though others are speculating that it could keep rising towards the $1m mark.
Bitcoin only exists online, has no central bank and isn’t linked to or regulated by any state.
An anonymised record of every bitcoin transaction is stored on a huge public ledger known as a blockchain.
However, transactions made with the cryptocurrency are irreversible, which makes investors in bitcoin attractive targets for cybercriminals.