Bitcoin has tumbled 18 per cent to a four-week low close to $US11,000 ($A15,400), after reports that a ban on trading of cryptocurrencies in South Korea is still an option, driving fears of a wider regulatory crackdown.

Bitcoin's slide triggered a massive selloff across the broader cryptocurrency market, with biggest rival Ethereum down 23 per cent on the day, according to trade website Coinmarketcap, and the next-biggest, Ripple, plunging 33 per cent.

South Korean news website Yonhap reported Finance Minister Kim Dong-yeon had told a local radio station that the government would be coming up with a set of measures to clamp down on the "irrational" cryptocurrency investment craze.

South Korea had said on Monday that its plans to ban virtual coin exchanges had not yet been finalised, as government agencies were still in talks to decide how to regulate the market.

Bitcoin slid on the latest news, trading as low as $US11,191.59 on the Luxembourg-based Bitstamp exchange, down 18 per cent on the day, for a short period putting the digital currency on track for its biggest one-day fall in three years.

"It's mainly been regulatory issues which are haunting the cryptocurrency, with news around South Korea's further crackdown on trading the driver today," said Think Markets chief strategist Naeem Aslam, who holds what he described as "substantial" amounts of bitcoin, Ethereum and Ripple.

"But we maintain our stance. We do not think that the complete banning of cryptocurrencies is possible."

Cryptocurrencies enjoyed a bumper year in 2017 as mainstream investors entered the market and as an explosion in so-called initial coin offerings (ICOs) - digital token-based fundraising rounds - drove demand for bitcoin and Ethereum, the second-biggest digital unit.

The latest tumble leaves bitcoin down more than 40 per cent from the record high around $US20,000 it hit in mid-December, wiping about $US130 billion off its "market cap" - the unit price multiplied by the total number of bitcoins that have been released into the market.