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

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SpaceX founder and Tesla CEO Elon Musk watches as he visits the construction site of the Tesla gigafactory in Gruenheide near Berlin on May 17, 2021.

Michele Tantussi | AFP

Cryptocurrency-related stocks, led by Tesla and Coinbase, fell on Wednesday as Bitcoin broke the equivalent of a bear market in just one day.

Bitcoin, the world’s largest digital token, was down 20% in 24 hours on an 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, falling below $ 37,000 at one point early Wednesday. (Any decrease in an asset or security by more than 20% is considered a bear market.)

The move comes after China banned financial institutions from conducting crypto transactions on Tuesday. Separately, a JPMorgan report showed that large institutional investors ditched Bitcoin in favor of gold.

The decline in Bitcoin this month has worsened a week ago after Elon Musk apparently changed his mindset about crypto a bit by saying Tesla would no longer accept Bitcoin as a form of payment due to environmental concerns related to crypto mining.

Still a big Bitcoin holder, Tesla fell around 3% in premarket trading on Wednesday. The micro-strategy, which made headlines by buying a significant amount of Bitcoin for their corporate coffers, gained 8%.

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

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

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

Crypto-related stocks are falling amid the bitcoin slide

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