The Dirac Hamiltonian, which successfully describes relativistic fermions, applies equally well to electrons in solids with linear energy dispersion, for example, in bismuth and graphene. A characteristic of these materials is that a magnetic field less than 10 tesla suffices to force the Dirac electrons into the lowest Landau level, with resultant strong enhancement of the Coulomb interaction energy. Moreover, the Dirac electrons usually come with multiple flavors or valley degeneracy. These ingredients favor transitions to a collective state with novel quantum properties in large field. By using torque magnetometry, we have investigated the magnetization of bismuth to fields of 31 tesla. We report the observation of sharp field-induced phase transitions into a state with striking magnetic anisotropy, consistent with the breaking of the threefold valley degeneracy.