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

May 20, 2021: -On Wednesday, Cryptocurrency-related stocks led by Tesla and Coinbase dropped as bitcoin increased the equivalent of a bear market in a day.

Bitcoin, the world’s most significant digital token, decreased around $30,000 at one point on Wednesday, according to Coin Metrics. The price had come down roughly 24%.

On Tuesday, the move comes after China barred financial institutions from conducting crypto-related transactions. A JPMorgan report indicated large institutional investors were about to dump bitcoin in favor of gold.

This month’s pullback in bitcoin intensified almost a week ago after Tesla CEO Elon Musk wanted to change his tune a bit on crypto and said that the company would end accepting bitcoin for payment due to the environmental concerns surrounding crypto-mining.

“You had a confluence of events…where you started breaking down the positivity in the price action, and now we’ve got a liquidation event,” Galaxy Digital CEO and Chairman Mike Novogratz told CNBC. “It’s not going to bounce right back. It’ll consolidate for a while,” he added.

Tesla, a large holder of bitcoin, roughly decreased 4% on Wednesday. Microstrategy made headlines by purchasing a huge amount of bitcoin for its corporate treasury, which tanked by 10%.

The newly public crypto exchange, known as Coinbase, dropped around 9%. Bitcoin’s price approached $65,000 over a month ago before peaking around the time of Coinbase’s public debut.

Square and PayPal, which facilitate transactions in cryptocurrencies and have been big buyers, also lowered 4% and 1.5%, respectively, Wednesday morning.

Nvidia ticked down 2% after trading began. The company manufactures chips used in crypto-mining but reportedly trying to curb their use for that purpose.