Beginning at about 3 a.m. this morning, the price of bitcoin began to free fall on comments from the People's Bank of china with regard to "virtual capital controls." The average price paid for bitcoin, as reported by Bitcoin Wisdom, in China has fallen by over 20 percent in the last eight hours alone. The average bitcoin price in the United States is currently down close to 13 percent, near $990. The Bitcoin price crash in Canada, Europe, and Russia sees the cryptocurrency down near 12 percent in each country and region.

Beginning on December 20, the price of bitcoin began an almost parabolic move up, gaining close to 50 percent, before peaking early this morning.

The sharp rally in price has been attributed to a flight of capital from China, with Chinese citizens scrambling to move funds offshore, away from the yuan, which has seen its value steadily eroded with devaluations by the Chinese government. Chinese citizens moving funds out of the yuan, into bitcoin, is thought to have further exacerbated the yuan's slide, until today.

Rise in Chinese yuan seen causing bitcoin crash

The yuan rose today versus other currencies. The shift, combined with a thinly traded market for bitcoin, has been said to be the reason behind the downdraft. Bitcoin and the yuan are both regularly subject to periods of volatility.

"It is absolutely tied to China. If the yuan goes up, bitcoin goes down," CEO of CCO Global, Dan Collins, was quoted by CNBC.

Peter Smith, CEO of Blockchain, expressed a belief that the price will stabilize between $850 and $1,000. Perhaps hedging his view, Smith added: "but we'll see."

Cryptocurrency with history of volatility

From December 2013 to January 2015, bitcoin prices began a long slide from a high of near $1,175 to a low near $210, a crash of close to 80 percent.

Zero Hedge reported that it had "warned" readers about chasing the recent bitcoin price spike: cautioning against buying more at higher prices based solely on "momentum."

Bitcoin was first unveiled to the world on October 31, 2008, the work of a mysterious person or group known as Satoshi Nakamoto. In 2010, bitcoin could be purchased for under $1 each.

In 2014, Mark Williams, with the Finance Department at Boston University, produced a report stating that the volatility of bitcoin was 18 times that of the U.S. dollar, seven times that of gold, and eight times that of the stock market, as measured by the Standard & Poor's 500 Index.