Tesla, Coinbase Lead Crypto-Linked Stocks Fall As Bitcoin Plunges
SpaceX founder and Tesla CEO Elon Musk watches as he visits the construction site of Tesla’s gigafactory in Gruenheide, near Berlin, Germany on May 17, 2021.
Michele Tantussi | AFP
Bitcoin, the world’s largest digital token, fell 20% in 24 hours at one point on Wednesday, according to Coinbase. It has fallen by more than 30% in one week. (Any decline of more than 20% in an asset or security is considered a bear market.)
The price fell below $ 40,000 for the first time in 14 weeks and fell below $ 37,000 at some point early Wednesday.
The move comes after China on Tuesday banned financial institutions from conducting crypto-related transactions. In addition, a report by JPMorgan showed that large institutional investors were pouring bitcoins in favor of gold.
Bitcoin’s decline this month intensified a week ago Elon Musk appeared to change his song on crypto a bit saying Tesla would stop accepting bitcoin for payment due to environmental concerns surrounding crypto mining.
“You had a confluence of events … where you started breaking positivity into the price action, and now we have a liquidation event,” said Mike Novogratz, CEO and President of Galaxy Digital, on CNBC’s “Squawk Box”. “” It’s not going to bounce back just yet. It’s going to consolidate for a while. “
Tesla, still a large holder of Bitcoin, fell about 5% on Wednesday in pre-market trading. Microstrategy, which made headlines by buying a significant amount of bitcoin for its corporate treasury, fell 15%.
Coinbase, the new public crypto exchange, fell more than 10%. Bitcoin’s price approached $ 65,000 five weeks ago before peaking, around the time of Coinbase’s public debut.
NVDIA Corporation fell 4% in pre-market commerce. The company manufactures chips used in crypto-mining, but would have tried to limit their use for this purpose.
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– CNBC Michael bloom contribution to reports.