Crypto: Bitcoin's price fell 26% this week amid Fed tightening

Yahoo Finance’s Ines Ferré reports on how bitcoin is trading amid Fed tightening.

Video transcript

BRAD SMITH: Crypto has not been spared by the current market volatility. Bitcoin now trading at levels not seen since 2020. So let's toss it on over to Ines Ferre at the YFi Interactive for more on this crypto route. Ines, great to see you.

INES FERRE: Yeah, great to see you guys. Well, it's been a rough week for crypto holders, as we've seen Bitcoin that is lower this week. And it all really started when you had Celsius that halted the crypto platform, which halted withdrawals, transfer swaps of Bitcoin. You also had Coinbase, which announced that it was laying off, this week, 18% of its workforce, with CEO Brian Armstrong talking about a possible recession and a crypto winter.

And then in the backdrop of all of this, you had, of course, Bitcoin, which is the flagship crypto. And Bitcoin, I'm just going to pull up a 10-day chart because we really saw over the last 10 days, down 33%. A month to date chart, you can see it was around 31,000. Right now, it's at the-- just below the 21,000 level.

And guys, this really goes to that point-- and I know that Julie has mentioned this before-- that crypto, Bitcoin, seen by some as-- it was being talked about a hedge against inflation. When stocks go up or when stocks go down, Bitcoin will go up. No, it has not proven the case. And in fact, when you see the Fed tightening its screws, all asset classes come down.

BRIAN SOZZI: Yeah, indeed, they, in fact, have. Ines Ferre, thanks so much. And Brad, this is-- when I talk to folks on the Street, I don't hear anyone saying, I'm excited about crypto. I want to get in and buy this dip on crypto. I love that Coinbase is down 50%, 60%. Let me back up the truck and buy this. I'm not hearing any of that sentiment out there. Nothing.

BRAD SMITH: If anything right now, I think what we will hear is some of the major crypto bulls that are out there, who have invested either in directly crypto or in some of the crypto touching platforms, they're going to continue to try and say, OK, even with this move lower, you've got to like the fact that a lot of the other speculative assets are going to get the rug pulled out from underneath of them and to create more viability. That could, by the way, create more viability for the larger market capitalization currencies, whether that be Bitcoin, whether that be Ethereum.

And I, as I've always talked about in the past, a firm believer or bullish in the flippening, which is where Ethereum takes over the value of Bitcoin. I think still, even from this point, it's going to come down to not just proof of concept. Proof of scaling is going to need to be next as well, when you have even more people that want to tap into the blockchain.

And this-- I think, for one thing, in all of the downward movements, it gives people more of an opportunity to get educated on this and perhaps do even more due diligence than people do when something is on the rise, on the way up, and seeing some of these astronomical rises, because then, it's just like, all right, a FOMO trade at that point.