HONG KONG • Bitcoin advocates are asking how much lower it could go as the world's largest cryptocurrency continued to slump following its biggest one-day loss in eight months.

The digital token fell as much as 5.9 per cent to US$5,221 , having plunged through a key resistance level on Wednesday after a period of relative tranquillity.

Many of the bitcoin's closest peers also slid on Thursday, while bitcoin cash, which was set to split into two coins yesterday, sank another 10 per cent.

As the dust settled a day after the Bloomberg Galaxy Crypto Index's 15 per cent tumble, speculation over its causes includes today's debut of the new version of bitcoin cash. Traders are mulling whether the coin, which itself broke off from the original bitcoin last year, is sucking investment and miners away from the largest crypto.

The plunge disrupted a trend of lower daily spikes and sell-offs for cryptocurrencies, often criticised in financial markets as being too unstable for use as in investment or as a currency. Only a week ago, the bitcoin's 30-day volatility had dropped to 21.2, below that of the Standard & Poor's 500 index for the first time in two years, according to prices compiled by Bitstamp.

"The bitcoin cash hard fork is proving far more destabilising than initially thought as numerous competing factions muddy the landscape," Oanda Corp's head of trading for Asia-Pacific, Mr Stephen Innes, said in a note.

BLOOMBERG