Bitcoin dropped as much as 6% on Monday, with fears over a fast-spreading new coronavirus strain in Britain hitting assets across wider markets.
The cryptocurrency was last down 5.5% at $22,156 after hitting a record $24,298.04 on Sunday.
European shares fell 3%, the dollar strengthened and market volatility surged amid growing unease over the economic impact of the new strain of the virus, which has seen several European countries shut their borders to the UK.
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Bitcoin’s relationship with traditional assets is inconsistent, with the cryptocurrency’s recent history punctuated by periods of both correlation and dislocation with wider market moves.
Smaller coins like ethereum and XRP, which usually trade in tandem with bitcoin, fell 5.9% and 9.2% respectively.
Bitcoin passed the $20,000 milestone for the first time last week, and is up more than 210% this year, amid surging interest from larger investors who variously see the cryptocurrency as a hedge against the threat of inflation, a risk-on asset, and a future payment method.
Analysts at JPMorgan said in a note on Friday that recent moves by traditional investors such as insurance companies to buy bitcoin had sparked speculative buying.
“We find it difficult not to characterize bitcoin as overbought at the moment,” they added.