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Bitcoin surged as much as 18% after a wild day that saw the cryptocurrency briefly drop below $30,000

Bitcoin continued to rebound from its lows for the year on Wednesday.

The cryptocurrency sank below the key $30,000 threshold Tuesday, at one point briefly erasing all its 2021 gains. It later recovered to turn positive for the day.

On Wednesday, bitcoin surged 18%, climbing back above the $34,000 mark in early morning trading, according to Coin Metrics data. It last changed hands at $33,641.27, up 3% on the day.

Smaller rivals also surged, with ether rising 6% to $2,014 and XRP up 9% at a price of 64 cents. The reason for the moves higher wasn’t clear, but cryptocurrencies are known for their volatility.

Bitcoin had a solid start to the year, rallying to an all-time high of almost $65,000 ahead of crypto exchange Coinbase’s blockbuster debut and as institutional investors appeared to be warming to it.

But the world’s biggest digital coin has been on a roller-coaster ride since, almost halving in value amid a slew of negative news.

In China, authorities have been clamping down on bitcoin mining, the power-intensive process for validating transactions and generating new bitcoins. Over the weekend, Beijing’s crackdown on crypto mining extended to the hydropower-rich Sichuan province.

Investors have also become more concerned about bitcoin’s environmental impact, after Tesla CEO Elon Musk decided to stop accepting bitcoin as a method of payment for his company’s vehicles.

At the time, Musk said he was worried about bitcoin’s huge energy consumption and the “rapidly increasing use of fossil fuels” in mining the digital asset. However, he later said Tesla would accept bitcoin when at least half of bitcoin mining is confirmed to be powered by clean energy.

Critics of the cryptocurrency have long been wary of its impact on the environment. That could threaten the adoption of bitcoin by institutional investors, which are under growing pressure to invest in cleaner, more ethical assets.

Meanwhile, there have also been concerns about tether, a so-called stablecoin whose price is meant to be pegged to the U.S. dollar.

Tether is now the world’s third-largest digital currency with a market value of more than $60 billion. But some investors are worried tether’s issuer doesn’t have enough dollar reserves to justify its peg to the greenback.

Reference: CNBC