Chinese bitcoin exchange BTCChina said on Thursday that it would stop all trading as of September 30, leaving bitcoin to face a 30% slashing from its record highs earlier in the month.

Todd 'Bubba' Horwitz, founder of bubbatrading.com said that the cryptocurrency craze is part of the reason gold was not headed much higher. With the virtual currency now falling more than $500, will investors return to gold?

"I don't look at gold as a fear asset, it is a currency. If the fiat currency fails then gold is a great haven to be owning," Horwitz said.

"Gold is doing great - it is not doing as well as we want it to be doing because based on where the dollar is, it should be higher -- but based on all the interest in cryptocurrencies they had taken away some of the steam." "Gold's hold at $1,322 was a key hold and we should head back to $1,331."

On U.S. exchange Bitstamp, Bitcoin slid as much as 10% to a five-week low of $3,426.92, having hit a record high of nearly $5,000 on September 2.

Prior to bitcoin's drop on Thursday, Mohamed El-Erian, chief economic adviser for Allianz said that investors should start asking plenty of questions when it comes to bitcoin.

"The most important question is, what is being assumed at these levels?" he noted in an interview with TheStreet. 'What's being assumed at these levels is a major adoption of bitcoin by many institutions, by many individuals. I think that's an overreaction. I don't think bitcoins will get adopted simply because central banks are going to be very uncomfortable."

Here is El-Erian talking North Korea, too. 

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This article is commentary by an independent contributor. At the time of publication, the author held TK positions in the stocks mentioned.