Tesla, Coinbase lead drop in crypto-related stocks as bitcoin plunges

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SpaceX founder and Tesla CEO Elon Musk looks on as he visits the construction site of Tesla’s gigafactory in Gruenheide, near Berlin, Germany, May 17, 2021.
Michele Tantussi | Reuters

Cryptocurrency-related stocks led by Tesla and Coinbase dropped on Wednesday as bitcoin plunged the equivalent of a bear market in just a single day.

Bitcoin, the world’s largest digital token, was down 20% in 24 hours at one point early Wednesday, according to Coinbase. It’s down more than 30% in a week. The price fell below $40,000 for the first time in 14 weeks and dropped below $37,000 at one point early Wednesday. (Any drop more than 20% in an asset or security is considered a bear market.)

The move comes after China barred financial institutions from conducting crypto-related transactions on Tuesday. Separately, a JPMorgan report showed large institutional investors were dumping bitcoin in favor of gold.

The pullback this month in bitcoin intensified a week ago after Elon Musk appeared to change his tune a bit on crypto by saying Tesla would stop accepting bitcoin for payment because of environmental concerns surrounding crypto-mining.

Tesla, still a large holder of bitcoin, fell roughly 3% in premarket trading Wednesday. Microstrategy, which made headlines by buying a significant amount of bitcoin for its corporate treasury, tanked by 8%.

Coinbase, the newly public crypto exchange, dropped more than 6%.

Bitcoin’s price approached $65,000 five weeks ago before peaking. That was right around the time of Coinbase’s public debut.

Square and Paypal, which facilitate transactions in cryptocurrencies and have been big buyers, were also lower in premarket trading.

Crypto-related stocks drop amid bitcoin’s slide

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