Bitcoin crashes back to earth after roller-coaster ride: A bust or a buy?

NEW YORK/LONDON (Reuters) -Cryptocurrencies that seemed to be defying gravity just weeks ago came back down to earth with a bump on Wednesday after a roller-coaster ride which could undermine their potential as mainstream investments.

The two main digital currencies, bitcoin and ether, fell as much as 30% and 45% respectively, but significantly pared losses after two of their biggest backers – Tesla Inc chief Elon Musk and Ark Invest’s Chief Executive Cathie Wood – indicated their support for bitcoin.

While many analysts thought the explosion in crypto interest this year was not sustainable, the trigger for the shake-out was China’s move on Tuesday to ban financial and payment institutions from providing cryptocurrency services. It also warned investors against speculative crypto trading.