Steam is one of the most popular gaming services in the world, with 67 million monthly active players, putting it head-to-head with Sony's PlayStation Network.
Valve engineer Kurtis Chinn said this meant transaction fees for customers buying games went up and down too quickly as bitcoin fluctuated in value.
Steam first began accepting bitcoin in April 2016.
In a blog post announcing the changes, Steam engineer Kurtis Chinn wrote: "As of today, Steam will no longer support Bitcoin as a payment method on our platform due to high fees and volatility in the value of Bitcoin."
Steam rivals Sony's PlayStation Network as the world's biggest gaming service, with 67 million monthly active players versus Sony's 70 million monthly active users.
The decision to halt bitcoin payments doesn't seem to be related to the various controversies around bitcoin — such as whether it predominantly benefits criminals and is a massive energy drain — but because it's skyrocketing value means higher transaction fees.