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

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, fell to nearly $30,000 at one point Wednesday morning, according to Coin Metrics. The price was down roughly 24%. (Any drop greater than 20% in an asset or security is considered a bear market.)

The move comes after China on Tuesday barred financial institutions from conducting crypto-related transactions. 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 Tesla CEO Elon Musk appeared to change his tune a bit on crypto by saying the company would stop accepting bitcoin for payment because of 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’s “Squawk Box.” “It’s not going to bounce right back. It’ll consolidate for a while.”

Tesla, still a large holder of bitcoin, fell roughly 4% Wednesday morning. Microstrategy, which made headlines by buying a significant amount of bitcoin for its corporate treasury, tanked by 10%.

Coinbase, the newly public crypto exchange, dropped nearly 9%. Bitcoin’s price approached $65,000 five weeks ago before peaking, around the time of Coinbase’s public debut.

Square and PayPal — which facilitate transactions in cryptocurrencies and have been big buyers — were also lower 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.