Bitcoin Plunges 25% in 24 Hours

Digital currency has lost more than $120 billion of its total market value in less than a week.

The price of bitcoin tumbled sharply Friday, wiping away one-fourth of its market value in 24 hours, as a wave of selling hit the broader cryptocurrency market just before the Christmas holiday weekend.

Bitcoin traded Friday afternoon at $13,100 after earlier falling to as low as $10,835, according to research site CoinDesk. Thursday morning, bitcoin had traded at about $16,000. The notoriously volatile digital currency started December at about $10,000 and shot up to nearly $20,000 this past weekend, but has been in retreat since.

The latest jolt to the already fragile market came Friday morning when one of the biggest hedge-fund supporters of cryptocurrencies, Michael Novogratz, tweeted that bitcoin could slide another $4,000 before resuming its bull-market run.

In an interview, Mr. Novogratz said that he postponed a new crypto-focused fund last week that was slated to open Dec. 15. “It’s a challenging time to launch a fund,” he said, adding that he recently sold a “significant amount” of virtual-currency holdings, though he still has about 50 investments there including bitcoin.