Bitcoin and other major cryptocurrencies took a hit Wednesday morning, after China banned financial institutions and payments companies from offering bitcoin and other cryptocurrency services to clients, Reuters and reported.

Bitcoin was down as much as 5.3% to $54,260 in New York, continuing a week-long retreat that has been rocked by Tesla chief executive Elon Musk's comments on the company's holdings of the cryptocurrency.

The ban, which also applies to registration, clearing, trading and settlement, was announced in a joint statement by the National Internet Association of China, Payment and Clearing Association of China, and China Banking Association that pointed to concerns over speculation and volatility, Bitcoin Magazine said.

"Recently, crypto currency prices have skyrocketed and plummeted, and speculative trading of cryptocurrency has rebounded, seriously infringing on the safety of people's property and disrupting the normal economic and financial order," Reuters quoted the Chinese internet and financial officials as saying in a statement.

The measure restricts Chinese financial institutions from issuing cryptocurrency products or services, but it doesn't ban consumers from owning cryptocurrencies. Similar bans or regulatory notices have been carried out earlier this year in Turkey and Nigeria.

The price of bitcoin is now at its lowest since early February and other cryptocurrencies have also taken a beating. Ethereum shed more than 8%. Dogecoin also took a hit.

The moves were not China's first against cryptocurrency. In 2017, Beijing shut down its local cryptocurrency exchanges, stifling a speculative market that had accounted for 90% of the world's bitcoin trading.

"This is the latest chapter of China tightening the noose around crypto," Antoni Trenchev, managing partner and co-founder of Nexo, said.

According to Forbes, cryptocurrencies rose almost 500% over the past 12 months as companies like MicroStrategy, Square and Tesla started investing heavily on cryptocurrency, but as proof of the market's high volatility, prices have fallen by more than a quarter since Elon Musk said last month Tesla would no longer continue investing in bitcoin.