September 26, 2023

Bitcoin (BTC) is in short supply at Tesla, even though its CEO predicts that inflation in the United States has already peaked.

Speaking of Tesla’s 2022 Annual Meeting of Shareholders On August 5, Elon Musk predicted that a coming recession in the United States would be only “mild to moderate.”

Cost Mask: ‘Trend is down’

After recently selling nearly all of its nearly $1.5 billion worth of BTC, Tesla is seeing the emergence of exactly the kind of financial landscape in which risk assets thrive.

During a Q&A session at the Annual Meeting, Musk revealed that semi-annual freight pricing for Tesla parts is already getting cheaper, not more expensive.

Commodities, he said, are trending lower, giving an indication that inflation has already reached its highest levels.

“We kind of have a picture of where the prices are headed over time, and the interesting thing we’re seeing now is that most of our products, most of what goes into a Tesla — not all, more than half — the prices they fall in six months,” he said.

“That could change, obviously, but the trend is down, which suggests we’re past peak inflation.”

The recovery from an inflationary period with commodities going downhill provides fertile ground for a rebound in risk assets, including cryptocurrencies. In theory, this results from lower inflation meaning less tightening by the Federal Reserve, providing favorable conditions for high-risk investments.

Should strength return to the markets and cryptocurrencies outperform, the trend will be ironic for Tesla, which divested almost all of its BTC exposure — for 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 per se.

The Annual Meeting, meanwhile, produced further upbeat macroeconomic forecasts, including a possible US recession that would be “relatively mild” and last around eighteen months. Inflation, Musk added, will “fall quickly.”

A race higher in the second half of 2022

The irony of Musk’s comments was it was not lost in crypto commentators and other voices are already betting that stocks are here to stay.

Related: Bitcoin Price: ‘Expected’ Weekend Volatility With $22,000 Level To Hold

Among them is Fundstrat Global Advisors, which this week noted that markets hit historic lows a six-month period before the Fed stops tightening through key rate hikes.

The second half of 2022, the firm predicted, could lift the S&P 500 to 4,800 points — a boon for crypto markets that are still highly correlated with stock movements in general.

As Cointelegraph reported, further information on Bitcoin’s potential comeback came from the world’s largest asset manager this week. BlackRock, with more than $9 trillion in assets, has partnered with US exchange Coinbase to offer cryptocurrency exposure to clients.

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