Elon Musk is one of the richest men on the planet. Image: YouTube
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Tesla CEO Elon Musk has once again taken to Twitter to share his thoughts on crypto, vowing that he "won't sell" his holdings of Bitcoin, Ethereum and Dogecoin.
Musk made the comments in a Twitter thread discussing inflation. “Tesla [and] SpaceX are seeing significant recent inflation pressure in raw materials [and] logistics,” wrote Musk after asking his audience for their thoughts on the “probable inflation rate [over] the next few years.”
Michael Saylor, CEO of MicroStrategy and well-known Bitcoin bull, was one of the largest accounts to respond to Musk. Naturally, he expects flight from “cash, debt, [and] value stocks” to his preferred asset, Bitcoin, to “intensify.”
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.
To that, Musk agreed in part, adding that “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,” and stating that he doesn't intend to sell his crypto holdings.
MicroStrategy and Tesla are perhaps the largest companies to hold actual Bitcoin on their balance sheets.
Musk has, however, been more diverse in his crypto exploration, at one point becoming the “Dogefather” of Dogecoin. The Tesla CEO’s tweets about Dogecoin have also spurred the meme coin into impressive, if not controversial, price rallies.
The latest tweet mentioning Dogecoin has had a similar effect too. DOGE jumped from $0.111 to $0.119, roughly a 7% increase, according to data pulled from CoinMarketCap. The leading dog coin has since shed some of those gains and is trading at $0.115.
As for fighting off inflation, many investors in traditional markets are scrambling for safety. Whether crypto becomes a shelter, though, remains to be seen.
Musk, crypto, and inflation
Though Musk may be the only corporate CEO to suggest holding Dogecoin to remedy rising prices, firms around the world are keeping a close eye on rising inflation.
The consumer price index (CPI), a basket of commodities ranging from vehicles and milk to cereal and clothing, hit a 40-year high last week, according to a report from the U.S. Labor Department. Compared to prices from February 2021, recent figures indicate a jump of 7.9%.
Inflation metrics. Source: Bloomberg.
Russia’s ongoing invasion of Ukraine will continue to pile on pressure too.
Various global sanctions have put a stranglehold on Russia’s finances, but these restrictions have also led to a serious spike in the price of commodities and gasoline.
Sanctions and rising inflation have also been pitched as the precise problems that deflationary assets like Bitcoin aim to solve. Transactions on the Bitcoin network cannot be blocked by third parties, and Bitcoin’s capped supply of 21 million means that there is a limited amount that will ever exist.
Still, even amid its proselytized advantages, Bitcoin has traded sideways, ranging between $44,000 and $39,000 since the beginning of January. This range is also a far way off of its all-time high of $68,789 which was set in November last year.
Disclaimer
The views and opinions expressed by the author are for informational purposes only and do not constitute financial, investment, or other advice.
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