However, some experts said the bitcoin price could bounce back.
It comes after underwear entrepreneur Michelle Mone last week announced the launch of £250million luxury property development in Dubai, priced in bitcoin.
Financial company CoinIRA chief executive Trevor Gerszt said: “Recent pullback in price was in large part a reaction to the announcement that China is banning ICOs (Initial Coin Offerings).
“To be clear, they have not made bitcoin illegal.
“There has been $1.5 billion raised this year in the ICO market which has gone largely unregulated and many have lost money due to scams.
“Smart investors are seeing this as a buying opportunity; this technology is here to stay and will continue to have long-term value.”
Yoni Assia, co-founder and chief executive of eToro added: “Most large financial institutions are well on the road to accepting the enormous potential of blockchain technology, and many have invested significant sums in research, product development, and directly in cryptocurrencies.
“Blockchain technology and cryptocurrencies have the potential to sweep away all of today’s incumbent financial institutions.”