Bitcoin prices have tumbled over $1,000 over the past month as China clamps down on cryptocurrency.
Chinese authorities have reportedly decided to ban the trading of Bitcoin and other cryptocurrencies on domestic exchanges, the Wall Street Journalreports. That has pushed Bitcoin as low as $3,978 over the weekend. It has since ticked upward to about $4,177 as of early Monday.
That’s a 20% drop since the start of September, when China’s central bank said it would ban initial coin offerings—tipping the cryptocurrency from its all-time high of above $5,000.
Prior to China’s most recent clampdown on Bitcoin and other cryptocurrencies, Bitcoin had been soaring as investors grew more optimistic about the future cost and speed of transactions.
But news of China’s potential exchange ban has likely spooked investors. The country accounts for a hefty portion of the Bitcoin market, with about 18% of trades being conducted in Chinese yuan, according to CryptoCompare.
Investors in China have been using Bitcoin as a way to protect themselves should the yuan fall in value. Trading their yuan in for Bitcoin can allow Chinese investors to move funds outside of the country. Traditionally, China’s government has set a $50,000 annual limit on how much its citizens can move outside of the country. Buying Bitcoin was a way to bypass those rules.
Still, the ban is not exactly a ban on trading Bitcoin entirely. It still will allow for over-the-counter transactions. While existing users will likely still trade, according to Zhou Shuoji, a founding partner at FBG Capital interviewed by Bloomberg, it will make it more difficult for new users to start trading Bitcoin—thereby limiting Bitcoin’s potential growth.
Notably, the ban has yet to be officially announced in China, according to the Wall Street Journal.
The price of Ethereum also ticked upward slightly to about $290 early Monday, up from $283 over the weekend as investors continued to digest reports of the ban in China.
This is part of Fortune’s new initiative, The Ledger, a trusted news source at the intersection of tech and finance. For more on The Ledger, click here.
