Bitcoin dropped below US$7,000 on Friday to trade more than 5 per cent down on the day, having fallen by well over US$1,000 since hitting an all-time high on Wednesday.

Bitcoin dropped to US$6,800 on the Luxembourg-based Bitstamp exchange by 7 a.m. ET, before recovering a little to US$6,870 just over 20 minutes later.

On Wednesday around 1 p.m. ET, it had touched US$7,888 after a software upgrade planned for next week that could have split the cryptocurrency in two was suspended.

Why banks need to worry about bitcoin

World-renowned bitcoin expert Andreas Antonopoulos explains why the cryptocurrency isn't going away and why banks need to worry.

In an exclusive broadcast interview on BNN, Ontario Teachers' Pension Plan Chief Investment Officer Bjarne Graven Larsen said it’s too early for his fund to get into Bitcoin due to concerns about the amount of illegally-generated cash flowing into cryptocurrencies.

“We are a bit skeptical in the sense that it’s not really regulated, you’re not really sure who’s behind this,” he said. “Personally, I do not like the fact that you know there’s a lot drug money, there’s a lot of illegal money in these cryptocurrencies. So I think it’s early days.”

As bitcoin fell, Bitcoin Cash - a clone of the original that was generated from another split on Aug.1 - surged, trading up as much as 35 per cent on the day at around US$850, according to industry website Coinmarketcap.

Despite losing almost 7 per cent this week, bitcoin is still up more than 600 per cent so far this year.

- with files from BNN