Bitcoin slumped to a two-week low, with some analysts pointing to the recovery of Colonial Pipeline's ransom as evidence that crypto isn't beyond government control.

The largest token tumbled as much as 12.05 per cent to $31,623.98 (8.40 pm IST) in New York trading. The wider Bloomberg Galaxy Crypto Index fell as much as 12 per cent, with altcoins such as Ethereum, Litecoin and EOS dropping more.

The fact that investigators “could trace the untraceable and seize it might be undermining the libertarian, free-of-government-control case,” said Jeffrey Halley, a senior market analyst at Oanda. The implications of that may have provoked the selling, he said.

The US recovered almost all the Bitcoin ransom paid to the perpetrators of the cyber attack on Colonial last month in a sign that law enforcement is capable of pursuing online criminals even when they operate outside the nation's borders.