Bitcoin price tumbles $500 as goldrush knocks world's largest exchange offline

A dramatic rise in the value of bitcoin caused the world's largest cryptocurrency exchange to grind to a halt and fall offline.

Bitcoin rocketed from $1,250 (£970) per coin to just under $2,800 in the space of a month, and gained by some $300 on 25 May alone. This, along with media coverage tracking the surging value, brought huge numbers of users to online exchanges, where bitcoins are bought and sold for fiat currencies like pounds and dollars

As a result, Coinbase, the world's most funded bitcoin exchange, which operates in 32 countries, could no longer cope with demand. The site became slow, new accounts could not be created, and eventually it fell offline.

Customers new to bitcoin, but keen to invest due to stories of early investors earning millions, also flooded the exchange, setting up new accounts and throwing speculative cash into what quickly became a bubble ready to burst. Hours later, with bitcoin knocking on the door of a record high of $2,800 and Coinbase offline, bitcoin tumbled to $2,300.

A partial recovery has taken bitcoin back up to $2,600 at the time of publication, but the fall acted as a stark reminded of the turbulent days of 2013 and 2014.