Bitcoin tumbled below the $40,000 mark on Wednesday for the first time in more than three months after China banned financial and payment institutions from providing cryptocurrency services.

Trading in cryptocurrencies has been banned in China since 2019 to prevent money laundering as leaders try to stop people from shifting cash overseas. The country had been home to around 90 percent of the global trade in the sector.

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And in a statement, three state-backed industry associations said "cryptocurrency prices have skyrocketed and plummeted, and cryptocurrency trading speculation activities have rebounded".

The price fluctuations "seriously violate people's asset safety and disrupt normal economic and financial order", said the statement, which was posted to social media by the People's Bank of China.

The notice warned consumers against wild speculation, adding that the "losses caused by investment transactions are borne by the consumers themselves" since Chinese law offers no protection to them.&nbsp;

It reiterated that providing cryptocurrency services to customers and crypto-based financial products was illegal for Chinese financial institutions and payment providers.

China is in the midst of a wide-ranging regulatory crackdown on its fintech sector, whose biggest players, including Alibaba and Tencent,&nbsp;have been hit with big fines after being found guilty of monopolistic practices.

The central bank has also sought to promote its own heavily regulated digital yuan, which it is testing across the country in pilot schemes.

Bitcoin, the biggest and best-known cryptocurrency, had already been under pressure from a series of tweets from Tesla boss Elon Musk, but the news from China sent it as low as $36,250, a 15 per cent&nbsp;drop in the trading session.

Bitcoin's decline whacked other crypto assets, with Ether, the coin linked to the ethereum blockchain network, shedding as much as 28% on Wednesday to $2,426. It brings losses in the week since it hit a record high on May 12 to 40 per cent.

Meme-based dogecoin also tumbled,&nbsp;losing nearly 30&nbsp;per cent&nbsp;at one point, according to market tracker Coingecko.

Shares in the crypto exchange Coinbase dropped 5&nbsp;per cent&nbsp;in pre-market trading. Coinbase's share price has nearly halved from the peak hit on the day of its direct listing in April.

Cryptocurrency price declines last week were sparked by Musk's reversal on Tesla accepting bitcoin as payment. His subsequent tweets caused further confusion over whether the carmaker had shed its holdings of the coin.

The crypto asset selloff at a time when inflation fears are rising hurts the idea of the asset class as an inflation hedge.

Instead, more traditional hedges have been gaining ground, with gold up almost 6&nbsp;per cent&nbsp;this month.

The recent selloff in bitcoin and other digital currencies has sent market capitalisation of all cryptocurrencies to $1.7 trillion, down from the $2.5 trillion record hit earlier this month.

Bitcoin tumbled below the $40,000 mark on Wednesday for the first time in more than three months after China banned financial and payment institutions from providing cryptocurrency services.

Bitcoin tumbled below the $40,000 mark on Wednesday for the first time in more than three months after China banned financial and payment institutions from providing cryptocurrency services. Trading in cryptocurrencies has been banned in China since 2019 to prevent money laundering as leaders try to stop people from shifting cash overseas. The country had been home to around 90 percent of the global trade in the sector. And in a statement, three state-backed industry associations said "cryptocurrency prices have skyrocketed and plummeted, and cryptocurrency trading speculation activities have rebounded". The price fluctuations "seriously violate people's asset safety and disrupt normal economic and financial order", said the statement, which was posted to social media by the People's Bank of China. The notice warned consumers against wild speculation, adding that the "losses caused by investment transactions are borne by the consumers themselves" since Chinese law offers no protection to them. It reiterated that providing cryptocurrency services to customers and crypto-based financial products was illegal for Chinese financial institutions and payment providers. China is in the midst of a wide-ranging regulatory crackdown on its fintech sector, whose biggest players, including Alibaba and Tencent, have been hit with big fines after being found guilty of monopolistic practices. The central bank has also sought to promote its own heavily regulated digital yuan, which it is testing across the country in pilot schemes. Bitcoin, the biggest and best-known cryptocurrency, had already been under pressure from a series of tweets from Tesla boss Elon Musk, but the news from China sent it as low as $36,250, a 15 per cent drop in the trading session. Bitcoin's decline whacked other crypto assets, with Ether, the coin linked to the ethereum blockchain network, shedding as much as 28% on Wednesday to $2,426. It brings losses in the week since it hit a record high on May 12 to 40 per cent. Meme-based dogecoin also tumbled, losing nearly 30 per cent at one point, according to market tracker Coingecko. Shares in the crypto exchange Coinbase dropped 5 per cent in pre-market trading. Coinbase's share price has nearly halved from the peak hit on the day of its direct listing in April. Cryptocurrency price declines last week were sparked by Musk's reversal on Tesla accepting bitcoin as payment. His subsequent tweets caused further confusion over whether the carmaker had shed its holdings of the coin. The crypto asset selloff at a time when inflation fears are rising hurts the idea of the asset class as an inflation hedge. Instead, more traditional hedges have been gaining ground, with gold up almost 6 per cent this month. The recent selloff in bitcoin and other digital currencies has sent market capitalisation of all cryptocurrencies to $1.7 trillion, down from the $2.5 trillion record hit earlier this month.

Bitcoin tumbles below $40,000 after China's new crypto ban

Bitcoin slumped to a six-month low on Friday after China's central bank launched a fresh crackdown on cryptocurrencies, warning of the risks entailed in issuing or trading them.

Bitcoin, the world's biggest cryptocurrency, fell 9% to $6,929, its lowest since May, and was last down 7% at $7,107.

The People's Bank of China's Shanghai headquarters said it would tackle growing cases of illegality involving virtual currencies. It also cautioned investors not to confuse crypto with blockchain technology, the digital ledger that underpins many cryptocurrencies such as bitcoin.

The move came a day after regulators in Shenzhen launched a similar campaign, and came as the PBOC prepares to launch its own digital currency.

Chinese President Xi Jinping said last month that the world's second-biggest economy should accelerate the development of blockchain technology.

Bitcoin, known for its wild price swings, soared over 40% in two days after Xi's remarks, with investors betting that Beijing's backing of blockchain and plans for a digital renminbi would accelerate the mainstream embrace of cryptocurrencies.

But since late October bitcoin has slumped by nearly a third.

Jamie Farquhar, portfolio manager at London-based crypto firm NKB Group, said the PBOC statement crystallised a growing sense among crypto investors that China's embrace of blockchain would be unlikely to include cryptocurrencies like bitcoin.

"It's the realisation that the positivity over Xi's blockchain announcement was exaggerated," he said. "It may not include bitcoin at this point."

 
&nbsp;

Bitcoin slumped to a six-month low on Friday after China's central bank launched a fresh crackdown on cryptocurrencies, warning of the risks entailed in issuing or trading them.

Bitcoin slumped to a six-month low on Friday after China's central bank launched a fresh crackdown on cryptocurrencies, warning of the risks entailed in issuing or trading them. Bitcoin, the world's biggest cryptocurrency, fell 9% to $6,929, its lowest since May, and was last down 7% at $7,107. The People's Bank of China's Shanghai headquarters said it would tackle growing cases of illegality involving virtual currencies. It also cautioned investors not to confuse crypto with blockchain technology, the digital ledger that underpins many cryptocurrencies such as bitcoin. The move came a day after regulators in Shenzhen launched a similar campaign, and came as the PBOC prepares to launch its own digital currency. Chinese President Xi Jinping said last month that the world's second-biggest economy should accelerate the development of blockchain technology. Bitcoin, known for its wild price swings, soared over 40% in two days after Xi's remarks, with investors betting that Beijing's backing of blockchain and plans for a digital renminbi would accelerate the mainstream embrace of cryptocurrencies. But since late October bitcoin has slumped by nearly a third. Jamie Farquhar, portfolio manager at London-based crypto firm NKB Group, said the PBOC statement crystallised a growing sense among crypto investors that China's embrace of blockchain would be unlikely to include cryptocurrencies like bitcoin. "It's the realisation that the positivity over Xi's blockchain announcement was exaggerated," he said. "It may not include bitcoin at this point."

Bitcoin plummets to a six-month low on China crackdown

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Bitcoin tumbles below $40,000 after China's new crypto ban

Bitcoin plummets to a six-month low on China crackdown