Bitcoin Drops as Banks Cut Credit Card Support for Cryptocurrencies

Bitcoin was suffering another down day of trading Monday, falling more than 12% to $7,165 as banks begin to restrict the purchase of digital currencies through their credit cards. 

JPMorgan Chase (JPM) , Bank of America (BAC) and Citigroup (C) have all announced new restrictions banning the purchase of bitcoin using their credit cards, sending the digital currency to the doldrums. 

"At this time, we are not processing cryptocurrency purchases using credit cards, due to the volatility and risk involved," a Chase spokesperson told CNBC. "We will review the issue as the market evolves."

Capital One (COF) banned credit card purchases of cryptocurrencies last month and Discover (DFS) banned the practice since 2015.

The thinking behind the ban is two-fold: It prevents customers from making risky purchases of the volatile currencies and it also is a way to cut down on scammers who buy cryptocurrencies and then disappear. 

Bitcoin is down more than 60% from its all-time high in the $20,000 range.