Bitcoin continued its tumble after the China Banking Association warned members of risks associated with digital currencies.
The crypotocurrency fell below the $40,000 level to $37,000 mid-morning.
The statement from China's industry association said all members should "resolutely refrain from conducting or participating in any business activities related to virtual currencies."
The notice said such digital currencies were subject to great volatility.
A week ago, Bitcoin was trading above $50,105 after its price plunged 10% following Tesla CEO Elon Musk's reversal of his stance on the digital currency.
Musk announced that Tesla, his the electric car maker, would no longer accept Bitcoin as payment.
Other crypto assets took a hit as well on Wednesday, with Ether, the coin linked to the ethereum blockchain network, falling 15% to $2,966, while meme-based Dogecoin tumbled 15%, according to Coindesk.
The Associated Press contributed to this report.