Bitcoin craters | Stocks drop but close off lows | Elon Musk's diamond hands

WED, MAY 19, 2021

EVENING BRIEF

AS OF WED, MAY 19, 2021 • 04:16 ET

DJIA		33896.04
		-0.48%	-164.62

S&P 500		4115.68
		-0.29%	-12.15

NASDAQ		13299.74
		-0.03%	-3.90

Most Active

DOW
NAME	LAST	CHG	%CHG
AAPL	124.69	-0.16	-0.13%
CSCO	52.47	-0.46	-0.87%
MSFT	243.12	+0.60	+0.25%

S&P 500
NAME	LAST	CHG	%CHG
T	28.96	-0.59	-2.00%
AAPL	124.69	-0.16	-0.13%
AMD	76.23	+1.79	+2.40%

NASDAQ
NAME	LAST	CHG	%CHG
AAPL	124.69	-0.16	-0.13%
AMD	76.23	+1.79	+2.40%
TSLA	563.46	-14.41	-2.49%

EDITOR'S NOTE

Cryptocurrency investors went on a wild ride on Wednesday as bitcoin plummeted by as much as 30% and fell to about $30,000 at one point. The contagion spread to other forms of cryptocurrency, including ethereum.

A multitude of factors may have contributed to the sharp pullback in bitcoin. For starters, on Tuesday, China had warned financial institutions from providing services related to crypto transactions. JPMorgan's report that institutional investors are dumping the digital asset for
gold probably didn't help.

Bitcoin recovered to about $40,000 by the afternoon. Indeed, Elon Musk – whose Tesla is a bitcoin holder – assured his Twitter followers that the company has "diamond hands,"
implying the company won't sell out of its position.

Overall, major indexes were down today, but were off well of their lows by the time the market closed. The S&P 500 ended the day off just 0.3%. The Nasdaq Composite, which saw the heaviest selling early on, closed flat. Finally, the Dow Jones Industrial Average lost 164 points to end the day at 33,896.04. The 30-stock index was able to stem some of the bleeding, having dropped more than 500 points earlier in the day. For now, market pros aren't too concerned about crypto's plunge and its ripple effect in the broader market.

Bitcoin was the "last node of speculative fever that hadn't broken since February," noted Mike Santoli, CNBC's senior markets commentator. In fact, this decline might even be a good thing in the long term.

"This was bound to happen at some point in '21 and a somewhat of a reset in crypto-pricing is likely more healthy vs negative for the broader equity markets over time," Jordan Klein, an analyst at Barclays, said in a note.