The recent decline in the value of the bitcoin came after China stopped all its financial institutions from providing services for buying and selling cryptocurrencies.
China has warned investors to avoid gambling in corrupt currencies.
Last week, the value of the bitcoin fell by 10 percent when Elon Musk, owner of the American car company Tesla, announced that his company would no longer accept cryptocurrencies for buying and selling cars.
Bitcoin fell 13 percent on Monday, while other cryptocurrencies, including Ethereum and Digiccoin, fell 18 percent.
China banned cryptocurrency transactions in 2019 to curb money laundering. Despite the ban, people in China somehow managed to trade in corrupt currency, which caused trouble for China.
On Tuesday, three Chinese financial institutions, the National Internet Finance Association of China, the China Banking Association and the Payment and Clearing Association of China, issued a warning on social media.
The Chinese financial institutions, backed by the Chinese state, have warned people that they will not be protected if they incur any losses while trading cryptocurrencies.
These institutions warned the people that the recent change in the value of the corrupt currency is a violation of the security of people's assets and is affecting general economic and financial peace.
Neil Wilson of Markets.com says China has been putting pressure on cryptocurrencies for some time, but its recent move will put a lot of pressure on cryptocurrency trading.
Neil Wilson said: "Until now, regulators in Western countries have been very lenient with regard to cryptocurrency trading, but now their attitude may change."
In March this year, Elon Musk, owner of an American car company, announced that his company would allow customers to buy cars using cryptocurrency.
In February, when Alan Musk announced the purchase of $1 billion worth of cryptocurrency, the value of the cryptocurrency skyrocketed and Tesla made a profit of 900 900 million.
But last week, Elon Musk backtracked on his announcement that his company would no longer sell cars for cryptocurrency.
He said the reason for his decision was environmental degradation because bitcoin production uses a lot of energy. Bitcoins require large computers to run on electricity.
Elon Musk has said he is concerned about the use of fossil fuels to generate electricity to make bitcoins.
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