The world's largest cryptocurrency exchange has sent the price of bitcoin into free fall with the announcement it was adding support for rival currency bitcoin cash.
In a blog post on Tuesday, Coinbase said its more than 30 million customers would immediately be able to buy, sell, send and receive bitcoin cash.
Bitcoin cash is an offshoot or "fork" of the main bitcoin line, created in August this year, designed to allow for faster and cheaper transactions, reports news.com.au.
Following the news, bitcoin's price plummeted by 15 per cent, from a high of around US$18,400 ($26,413) to bottom out at US$15,580, according to research site CoinDesk. By early afternoon on Wednesday it was trading at around US$16,170.
Meanwhile, the price of bitcoin cash is skyrocketing, nearly doubling from around US$1,850 on Tuesday to US$3,500 at the time of writing.
Coinbase said customers who held bitcoin at the time of the fork on 1 August 2017 had been automatically credited with the appropriate amount of bitcoin cash for their accounts.
"Sends and receives are available immediately," the company said. "Buys and sells will be available to all customers once there is sufficient liquidity on GDAX. We anticipate that this will take a few hours.
"We have been monitoring the bitcoin cash network over the last few months and have decided to enable full support including the ability to buy, sell, send and receive. Factors we considered include developer and community support, security, stability, market price and trading volume.
"Coinbase maintains a strict trading policy and internal guidelines for employees. Coinbase employees have been prohibited from trading in bitcoin cash for several weeks."
It comes after the co-founder of the Bitcoin.com website and bitcoin cash backer Emil Oldenburg announced he had sold his entire bitcoin stash, describing the original bitcoin as "virtually unusable" as a currency due to high fees and long wait times.
"When I sold my bitcoin I had to pay US$50 and wait 12 hours for the transaction to go through because of this," Oldenburg told Swedish website Breakit. "It's completely unreasonable."
Oldenburg's business partner and chief executive of Bitcoin.com, Roger Ver, is one of the key figures behind the offshoot currency.
Meanwhile, the US Securities and Exchange Commission has temporarily suspended trading in a popular bitcoin-related stock whose price has soared by more than 5600 per cent year to reach a market valuation of US$11.3 billion, citing concerns about market manipulation.
Australian James Gilbert, the president and largest shareholder of blockchain technology specialist The Crypto Company, has seen his stake in the company balloon to US$1b, The Australian Financial Review reported.
In a statement, the SEC said trading was suspended "because of concerns regarding the accuracy and adequacy of information in the marketplace about, among other things, the compensation paid for promotion of the company, and statements in Commission filings about the plans of the company's insiders to sell their shares of The Crypto Company's common stock".
"Questions have also arisen concerning potentially manipulative transactions in the company's stock in November 2017," the SEC said.
"The Commission is of the opinion that the public interest and the protection of investors require a suspension of trading in the securities of the above-listed company."