The Bitcoin price continued its slide on Tuesday following China's decision to crack down on cryptocurrency crowdfunding.
Although it has recovered to US$4,420 now according to Coindesk, at one stage Bitcoin had fallen as low as US$4,037 on Tuesday.
This was almost 20% lower than the all-time high of US$5,013 that the cryptocurrency set over the weekend and once again demonstrates how volatile it can be.
Should you sell your Bitcoin?
Although at this stage China has only banned the use of cryptocurrencies for ICOs and crowdfunding activities, there are concerns that it could go a step further a ban the use of cryptocurrencies completely.
Whilst I'm not convinced that it will go as far as this, it is worth considering the implications of it doing so.
At present an estimated 80% of Bitcoin trading occurs in China. I believe a total ban of cryptocurrencies in the nation would lead to the Bitcoin price crashing down to Earth with a thud as traders offload their holdings and the demand side evaporates.
Because of this I think it would be prudent for traders to resist the temptation of buying the latest Bitcoin drop.
Instead of risking money in cryptocurrencies I would suggest investors look at some of the exciting small-cap growth shares that are listed on the Australian share market.
These include the likes of Big Un Ltd (ASX: BIG), GetSwift Ltd (ASX: GSW), and Livetiles Ltd (ASX: LVT).
