Elon Musk Won't Sell Bitcoin, Ethereum, Dogecoins as Inflation Soars and Recession Risk Grows
Tesla and SpaceX founder Elon Musk has reiterated his commitment to holding his stack of bitcoin (BTC), ethereum (ETH), and dogecoin (DOGE) when preaching to his more than 77m Twitter followers about ways to hedge against inflation.
In a recent Twitter post, Musk asked the Twitter community to share their thoughts about the probable inflation rate over the next few years. He then added that the inflation pressure is already affecting Tesla and SpaceX as prices of raw materials keep rising.
In response, Bitcoin bull and MicroStrategy CEO Michael Saylor speculated that "USD consumer inflation will continue near all time highs," while "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," Saylor added.
Adding to that, Musk said that it is usually better to own physical objects or stock in companies that make good products than fiat currencies when inflation is high.
"I still own & won’t sell my Bitcoin, Ethereum or Doge fwiw," he added, mentioning that he owns some ETH, ostensibly for the first time.
The topic of inflation has been a hot subject for the last couple of months.
The Consumer Price Index (CPI), a measure of the average change over time in the prices paid by urban consumers, surged to 7.9% in February, reaching a new 40-year high, the US Labor Department said on Thursday.
To address this rising inflation, the Federal Reserve is expected to carry out several rate hikes in 2022, one of which is set to come by as soon as this Wednesday.
While officials have long called the inflation "transitory," arguing that it would cool off as soon as supply chain bottlenecks are solved, some industry experts, particularly after the start of the war, are convinced that the risk of a recession has increased.
For one, economists at Goldman Sachs, an American multinational investment bank, have said that the chance of a recession in the US over the next year has risen as high as 35%. The bank has also downgraded its forecast for US economic growth in 2022, expecting no growth during the first three months of the year.
"Rising commodity prices will likely result in a drag on consumer spending, as households — and lower-income households in particular — are forced to spend a larger share of income on food and gas," the bank reportedly told clients on Thursday.
While the role that cryptoassets would play in all this is largely unclear, crypto enthusiasts, such as Product Lead at the Dogecoin Foundation, Timothy Stebbing, argued the current situation highlights the need for a new reserve currency that is not controlled by any government or other centralized entity.
At 08:54 UTC, BTC trades at USD 39,084, recovering from almost USD 37,700, reached earlier today. The price is unchanged in a day. ETH is also almost unchanged in a day after it jumped from USD 2,500 to almost USD 2,600 in the past several hours. DOGE rallied today from USD 0.11 to almost USD 0.179 before dropping to USD 0.115 The price is still down almost 1% in a day.
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