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 at its low point of the day was down more than 30% on the session to $30,001.51, its lowest since late January, according to Coin Metrics. The price was last down 14% to $37,210.89 as of 11:00 am ET. The cryptocurrency has been cut in half since hitting an all-time high above $64,000 in mid-April.

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.

“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.”

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.

Musk later Wednesday morning indicated Tesla is not selling its bitcoin amid the cryptocurrency’s drop. Tesla fell 4% Wednesday morning.

Microstrategy, which made headlines by buying a significant amount of bitcoin for its corporate treasury, tanked by 9%.

Coinbase, the newly public crypto exchange, dropped 7% after trading began. The website appeared to be down for some users Wednesday morning, but the company said it resumed service later a few hours later.

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

“Coinbase’s trading debut coincides with the top for Bitcoin and many traders can’t make a convincing argument that it will be able to recover all those losses since then,” said Edward Moya, senior market analyst at OANDA.

Square and PayPal — which facilitate transactions in cryptocurrencies and have been big buyers — were also lower 3.3% and 0.8% respectively, Wednesday morning.

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

Grayscale Bitcoin Trust, the popular trust holding a large amount of bitcoin, sunk 11% Wednesday morning.

— CNBC’s Michael Bloom contributed reporting.