Australia’s largest bitcoin exchange has been hit with a massive bitcoin price crash as the price of the virtual currency continues to plummet.

IBE Australia said in a report on Thursday that the bitcoin price fell over 40 per cent on Thursday.

The cryptocurrency has been in an unprecedented bubble for months and has since traded at a loss.

Its market cap was $US3.6bn at the end of September.

On Thursday, the price plunged nearly 90 per cent, falling to $US1.1bn by 5:30pm AEST.

It’s the biggest one-day fall in a year.

Bitcoin futures market in Sydney closed down about 1 per cent at $US8.70.

As of 7:20pm AEDT, it was down more than $US5,000 from the previous day’s price.

“This week, the bitcoin market has been highly volatile, with the price crashing over 40 percent on a single day, with futures trading down over $1,200 overnight,” IBE said in its report.

AUSTRALIAN CRISIS IN THE CURRENCY Market forces are driving down bitcoin price.

Photo: Bloomberg The report noted that the cryptocurrency is not only used by criminals and drug dealers, but also by ordinary Australians who are buying and selling it.

That means it is a commodity that can be used to speculate on the future.

In its report, IBE highlighted the volatility in bitcoin’s price and called for Australia to do more to combat it.

“The Australian Government should consider regulating the market, by establishing a regulator to oversee the market and regulating bitcoin exchanges,” it said.

Earlier this month, the Australian Securities and Investments Commission announced it would launch an inquiry into the cryptocurrency market.

But in its latest report, the regulator noted that it had not yet begun to conduct an inquiry.