By
Bhushan Akolkar
May 7th, 2024
While speaking about the most pressing issue of inflation, Elon Musk said that it would be better to own physical things like home or stock, but added that he would continue to hold his crypto.
Tech billionaire Elon Musk recently tweeted that despite inflation fears, he won’t sell his crypto holdings. The latest admission comes through his series of tweets sharing his thoughts about inflation.
Investors have been on the edge with the recent crypto market correction since the beginning of 2022. On the other hand, the United States reported 7.9% inflation for the last month of February 2022, the highest in over four decades.
Musk Speaking about Crypto
As the Federal Reserve is preparing for interest rate hikes ahead on Wednesday, Elon Musk shares his nuggets on the subject. Late Sunday, March 13, Musk asked his followers their thoughts about inflation in the coming years. The tech billionaire added that his companies SpaceX and Tesla have been already feeling inflation pressure.
Musk shares an article by Financial Times which shows that commodity prices have soared the highest since 2008. Sharing his view on how he plans to tackle this, Musk said:
As a general principle, for those looking for advice from this thread, it is generally better to own physical things like a home or stock in companies you think make good products, than dollars when inflation is high. I still own & won’t sell my Bitcoin, Ethereum or Doge fwiw.
Michael Saylor Jumps In to Defend Bitcoin
Soon after Musk tweeted about inflation, Bitcoin evangelist Michael Saylor was quick to respond. Being a Bitcoin maximalist, Saylor proposed that inflation could be good for Bitcoin. He wrote:
“USD consumer inflation will continue near all time highs, and asset inflation will run at double the rate of consumer inflation. Weaker currencies will collapse, and the flight of capital from cash, debt, & value stocks to scarce property like Bitcoin will intensify.”
Although Bitcoin has been designed to function as a hedge asset, history has suggested otherwise. Bitcoin has shown a close resemblance to the equity market and greater volatility. This makes it less suitable as a hedge asset class. Thus, with inflation and interest rate hikes, Bitcoin might face strong headwinds going ahead.
“This week will be big for #crypto and #equities traders, as the #Fed is expected to decide on a quarter-point rate hike this week. Bitcoin & #Ethereum have been pegged to the #SP500 in 2022, and these decisions should impact #cryptocurrencies greatly,” notes on-chain data provider Santiment.