Bitcoin trades below $23,000 following ECB rate hike

Yahoo Finance's Brian Cheung and Pras Subramanian discuss bitcoin volatility after the European Central Bank raised rates and Tesla sold its a majority of its bitcoin holdings.

Video transcript

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BRIAN CHEUNG: Welcome back to Yahoo Finance Live. Let's take a look at the YFi Interactive to get a check on how the cryptos are doing this morning. You can see it is-- yikes-- red across the board. When we take a look at Ethereum, down 6% intraday. If we also take a look at the big fish over here that is, of course, Bitcoin, down 6 and 1/2%, down to about 22,600, although that is still far above where we were when you consider how far we went down in 2022.

But of course, all of this action coming after Tesla reported earnings yesterday. And Elon Musk's company dipping 75% of its Bitcoin holdings out of crypto and into Fiat. Yahoo Finance's Pras Subramanian here on set to break down that specific storyline. Again, I mean, I don't know if it's a good thing that we're talking about car companies and their Bitcoin holdings, but that was pretty noticeable from yesterday.

PRAS SUBRAMANIAN: People thought they would take an impairment, actually, before the earnings came out on those holdings. But they actually sold, like you said, 3/4 of that Bitcoin reserve. They raised about $930 million for the concern about cash situation with stuff happening in China, potential slowdown there, more-- if there was going to be a shutdown down there.

So it's funny, Brian. I know that they said they mentioned they converted to Fiat, not dollars, Fiat currency. So what did they convert into? Was it Yuan because they're concerned about China liquidity situation? Was it euros? Was it dollars? So, interesting stuff there. But one thing I also want to note-- and maybe you also talk about-- it's like, they didn't sell the Dogecoin. He didn't sell the Dogecoin. He held on to that, so.