Bitcoin fell 20% from all-time highs reached earlier this month as a new Covid-19 variant led investors to dump riskier assets around the world.

The world’s largest cryptocurrency declined 7.5% to $54,430.35 in London trading on Friday. In addition, the second largest digital currency by market capitalisation, Ether, dropped as much as 11.6% to a week-low. It was last at $4,070, an 18% drop from its record high reached on 10 November, Reuters reports.

The latest variant of coronavirus detected in southern Africa resulted in liquidations throughout markets. European stocks fell the most in four months, whilst there was a slump in emerging markets, according to a Bloomberg report.

"The spread of (the variant), especially to other countries, could wither investor appetite further," according to Yuya Hasegawa at Tokyo-based exchange Bitbank. "BTC's upside will likely be limited and the market should brace for further loss."

Since Bitcoin reached an all-time high of $69,000 earlier in November, the digital currency has been under pressure over the enthusiastic response to the first U.S. exchange-traded fund linked to futures on the digital asset.

This week, analysts have pointed out several crypto stumbling blocks, such as the mounting regulatory crackdown in China and U.S. tax-reporting requirements for digital currencies. News of this latest Covid variant now risks undermining liquidity and risk appetite.

However, bulls remain committed to the stance that an increasing number of retail investors and institutions will embrace cryptocurrencies. Bitcoin is up more than 85% so far this year.