It has been a rough few days for the Bitcoin perma bulls.

Bitcoin plunged more than 8% to $4,309 on Monday thanks to one big action taken by the Chinese.

China has banned the practice of initial coin offerings (ICOs), or fundraising by the issue of digital currencies outside the regulatory framework. The country in effect has stepped up its policing of the trading of digital coins to ward off financial risks and potential social disunity.

Meanwhile, as TheStreet's Stephen Guilfoyle points out, several international banks are teaming up to join a project created by UBS Group AG (UBS) - Get Report to form a new digital currency that will (like other forms of cryptocurrency) clear and settle through block-chain technology. Big names like Barclays (BCS) - Get Report , Credit Suisse (CS) - Get Report , HSBC Holdings (HSBC) - Get Report and others have signed onto the effort.

The new coin, known as the "Utility Settlement Coin" will allow financial firms to pay for stocks and bonds without waiting for traditional money transfers to be completed. Hello new Bitcoin rival.

The series of developments underscores the fragility of the Bitcoin rally.

Bitcoin overall is a gigantic bubble, according to Peter Schiff, CEO of Euro Pacific Capital.

"What kept me out of it is understanding that it's not going to work - that bitcoin or any of these cryptocurrencies are never going to be money," Schiff said in an interview with TheStreet. "They're never going to achieve what everybody believes is going to happen. All that's happening now is people are speculating on something that isn't going to happen."

Schiff pointed to the dot-com bust in the early 2000s as an example of speculation that ended up crashing. "I think the same thing is going to happen with all these cryptocurrencies - they're going to collapse," he said.

Schiff said there is massive inflation among cryptocurrencies, noting that bitcoin isn't the only one. "They keep on creating them one after another - so the supply is going to ultimately overwhelm the demand," he said.

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