Bitcoin tanks, is Alibaba to blame?

The price of bitcoin has plummeted in the past few days, and some are blaming the Alibaba IPO for the virtual currency's fall.

Touching as low as $381.17 earlier Friday, bitcoin is trading at a far cry from its position around $513 less than a month ago or nearly $650 in July. And while the cryptocurrency has been languishing for several weeks, it's seen an increasing slide from Monday's open around $470.

Members of the bitcoin community are pointing fingers at the e-commerce giant's IPO, suggesting that tech-minded China-centric money is being pulled out of the currency in order to get into Alibaba's first day of trading.

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Writing for Bitcoin Magazine, Sembro Development President Ian Worrall said his firm believes "that the Chinese Bitcoin holders began dumping their holdings earlier this week to free up capital to invest in Alibaba when it goes public."

Worrall told CNBC this assessment is based on his software firm's finding that much of the bitcoin trade volume is coming from China during this selloff. In fact, Worrall said, the Chinese exchanges are seeing 52 percent more volume compared to their American counterparts over the last month.

Alibaba seemed the most likely explanation of the price decrease, Worrall said, as there have not been any major recent announcements related to the cryptocurrency, and "normally when there's a change this large it's because of some government regulation."

Euro Pacific Capital's Peter Schiff disputed this theory, telling CNBC "that's just grasping at straws."

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"They're just trying to find some excuse [for bitcoin's slide]," Schiff said. "I just can't think there are that many bitcoin guys that are going to jump into Alibaba."

Scott Mlyn | CNBC

Raffael Danielli, quantitative analysis blogger behind Matlab Trading, said an Alibaba-influenced selloff could have been possible, but the current timetable does not make sense.

"Selling your Bitcoins yesterday (and during the night) will only put USD into your Bitcoin exchange account. From there you have to still transfer it to your stock broker which usually takes a couple of days," he wrote in an email to CNBC. "In other words: if (!) people sold Bitcoins yesterday to buy into Alibaba then they are a bit late to the party."

Danielli suggested instead that the bitcoin downtrend may be because of several factors, including merchants' increasing adoption of the currency. When someone uses bitcoin to pay for a product, the merchant typically converts it immediately back into U.S. dollars, which means that the market is increasingly flooded with sellers.

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For his part, Schiff pointed to a weak technical profile for the cryptocurrency that has seen an overall downtrend since its peak in December.

And while bitcoin proponents often point to the volatility as a natural part of the currency's marketplace—there were similar fits and starts when it was worth less than $100—Schiff said that this time around is different.

"They remember all that volatility in the beginning, and they think this is the same thing: That was the bubble inflating, this is the bubble bursting," he said.

—By CNBC's Everett Rosenfeld