Bitcoin (BTC) is in short supply at Tesla, even as its CEO predicts US inflation has already peaked.
Speaking at Tesla’s 2022 annual meeting of shareholders on August 5, Elon Musk predicted that a coming US recession would only be “mild to moderate”.
Musk on costs: “The trend is downward”
After recently selling nearly all of its $1.5 billion in BTC holdings, Tesla is seeing exactly the kind of economic landscape emerging in which risk assets thrive.
During a Q&A session at the annual meeting, Musk revealed that six-month commodity prices for Tesla parts are already getting cheaper, not more expensive.
Commodities, he said, are trending lower, suggesting that inflation has already peaked.
“We kind of have an idea of how prices are changing over time, and the interesting thing that we’re seeing now is that most of our products, most things that go into a Tesla – not all , more than half the price – tend to go down six months from now,” Musk said.
“That could change, obviously, but the trend is down, suggesting we’re past peak inflation.”
The recovery from a period of inflation with falling commodities provides fertile ground for a rally in risky assets, including crypto. Theoretically, this results from lower inflation, which means less tightening by the US Federal Reserve, providing favorable conditions for risky investments.
If strength returns to the markets and crypto outperforms, the trend will be ironic for Tesla, which shed virtually all of its BTC exposure — with a profit of just $64 million — last month.
At the time, Musk added that BTC could return to the company’s balance sheet at a later date and that the decision was not a comment on Bitcoin. in itself.
The shareholders’ meeting, meanwhile, produced further upbeat macro forecasts, including a “relatively mild” potential U.S. recession lasting around eighteen months. Inflation, Musk added, “will come down fast.”
A superior race in the second half of 2022
The irony of Musk’s comments was not lost on crypto commentators, and other voices are already betting on a stock rebound being here to stay.
Related: Bitcoin Price: ‘Expected’ Weekend Volatility with $22,000 Level to Hold
Among them is Fundstrat Global Advisors, which noted this week that markets historically bottomed six months before the Fed stopped tightening via key interest rate hikes.
The firm has thus predicted that the second half of 2022 could take the S&P 500 to 4,800 points – a boon for crypto markets still strongly correlated to stock movements in general.
This is important to keep in mind
– the markets know that rates are rising
– it is the “shock” that hurts the markets
Today’s jobs report is not a “shock”
Get the “first word” at https://t.co/Vsy6WwaIxa @fs_insight https://t.co/HtuTCJANtO
— Thomas (Tom) Lee (not the drummer) FSInsight (@fundstrat) August 5, 2022
As Cointelegraph reported, this week the world’s largest asset manager provided further insight into Bitcoin’s potential comeback. BlackRock, with over $9 trillion in assets, has partnered with US exchange Coinbase to provide crypto exposure to clients.
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