The People’s Bank of China issued a statement on Tuesday cautioning against the use of cryptocurrencies as a means of payment. What Happened: Despite the fact that Chinese officials were merely reiterating their previous stance on trading virtual currencies, the news seemed to deepen the existing sentiment of market-wide fear. Bitcoin dropped under $40,000 for the first time in three months, losing 15% of its value overnight, while Ethereum dropped 23% in the past 24-hours to $2,715. Large-cap altcoins like Cardano, Polkadot, Dogecoin, and Binance Coin also reported losses in excess of 25% overnight. Why It Matters: The statement from the PBOC doesn’t have any new regulatory steps, Yu Lingqu, a vice-director at the China Development Institute think-tank in Shenzhen, told Bloomberg.