Bitcoin Falls as Much as 30% as Investors Sour on Cryptocurrencies

Investors have shunned riskier assets this week, marking a sudden shift in mood that is delivering heavy losses to inexperienced traders

The listing of Coinbase, the largest bitcoin exchange in the U.S., introduces a new way to invest in cryptocurrencies. WSJ explains how Coinbase is trying to distance itself from the risks of bitcoin to succeed on Wall Street. Photo illustration: George Downs

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Updated May 19, 2021 6:34 pm ET

Bitcoin, the volatile digital currency that briefly became a trillion-dollar market, plunged Wednesday as its monthlong slide morphed into a frenzied selloff.

Cryptocurrencies have surged over the past year on a wave of speculative excitement, spurred by famous backers as varied as Elon Musk, Paul Tudor Jones and Snoop Dogg.

That gave the small but growing crowd of bulls a feeling of inevitability that cryptocurrencies would mature into a significant asset class in their own right. Bitcoin, they wagered, might even fulfill its initial vision and become a legitimate alternative currency.

But the same momentum that drove prices higher is now sending them relentlessly lower.

Bitcoin, which traded around $7,000 at the beginning of 2020, peaked at $64,829 in mid-April. Since then, it has fallen 41% to $38,390 as of 5 p.m. ET Wednesday and earlier in the day dropped as low as $30,202.

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