Bitcoin prices dropped after China’s central bank approved a new regulation to limit speculation in the cryptocurrency.
The move by the central bank was expected to further reduce the price of the digital currency.
Bitcoin price on Monday fell to $8,800 (8,854 Chinese yuan) as speculation surged, falling below the $9,200 mark.
It is still trading below the US dollar, but it has gained a considerable amount of ground in the past week.
On Monday, a report by the State Administration for Industry and Commerce said the regulator would restrict the trading of cryptocurrencies, as the market continues to grow.
The regulation will come into effect on April 2, 2017, and will allow companies to impose restrictions on the use of digital currencies such as bitcoin and ether, the central banker’s press release said.
The regulator also plans to establish a mechanism to manage digital currencies, including monitoring their usage and trading.
The news comes as China’s government is trying to rein in the growth of cryptocurrency trading in the country.
It has imposed stricter capital controls, introduced more stringent regulations and tightened oversight of the industry, but there have been no serious incidents of fraud.
China has also announced that it will restrict cryptocurrency trading starting on April 1.