LONDON: Bitcoin climbed back above $40,000 on Wednesday for the first time this week, as recent volatility in the cryptocurrency market showed few signs of dampening down.

Bitcoin jumped as much as 6.5% to $40,904. Smaller coins, which tend to rise and fall with the largest cryptocurrency, also gained, with ether climbing over 7.5% to over $2,906.

Still, bitcoin is down 30% this month, and has lost over 37% from its record high of almost $65,000 hit in April. It has gained over 40% this year, however.

Among the drivers of bitcoin's recent slump have been fears of a crackdown in China on the emerging sector, as well as concerns over the environmental impact of bitcoin production, an energy-intensive process known as mining.

Bitcoin plumbed $30,066 last week, its lowest since January, in highly volatile trading.

China's northern region of Inner Mongolia escalated a campaign against cryptocurrency mining on Tuesday, publishing draft rules to root out the business, days after Beijing vowed to crack down on bitcoin mining and trading.