The world's most popular cryptocurrency was down 4.4% at $18,841 as of 1345 GMT. The price drop in bitcoin, which some investors have seen as a potential safe-haven, coincided with spot gold's 1.6% rise.
Smaller coins ethereum and XRP, which often move in tandem with bitcoin, fell 7.3% and 8.8%, respectively.
"The price remains highly volatile and draw-downs can be sharp, but volatility is important for the asset to scale, seek price discovery, attract attention and education and over time this volatility should subside," Davy Research analyst Roland French said, adding the sell-off was likely due to profit taking.
Bitcoin has gained around 160% this year, fuelled by demand for riskier assets amid unprecedented fiscal and monetary stimulus, interest in assets perceived as resistant to inflation, and expectations that cryptocurrencies will win mainstream acceptance.
Bitcoin's 12-year history has been peppered with steep gains and equally sharp drops. Compared to traditional assets, its market is highly opaque.
(Graphic: Bitcoin hits record high 
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(Reporting by Thyagaraju Adinarayan; editing by Bernadette Baum and Mark Potter)
