Bitcoin plummeted in price by more than 10 per cent on Wednesday after regulators in China announced a crackdown on cryptocurrency payments.
The price crash took bitcoin below $40,000 for the first time since February and was accompanied by wider market turmoil among other leading cryptocurrencies.
Ethereum (ether), Cardano (ada) and dogecoin all saw heavy losses of between 15 and 20 per cent.
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The news in China means that financial institutions will no longer be allowed to support crypto transactions.
Banks, payment platforms and lending institutions are effectively banned from offering customers any cryptocurrency services, including trading.
Three industry bodies also warned investors in a joint statement about the volatility of cryptocurrency markets.
“Recently, cryptocurrency prices have skyrocketed and plummeted, and speculative trading of cryptocurrency has rebounded, seriously infringing on the safety of people’s property and disrupting the normal economic and financial order,” the regulators said in a statement.
