Bitcoin (BTC) is in short supply at Tesla, even with its CEO predicting that US inflation has already peaked.
Speaking at Tesla’s 2022 annual meeting of stockholders on August 5, Elon Musk predicted that the next recession in the United States would be “mild to moderate.”
Musk on Costs: “Trend Down”
After selling all of its $1.5 billion BTC holdings recently, Tesla is seeing the emergence of the kind of economic landscape in which risky assets are thriving.
During a question-and-answer session at the annual meeting, Musk revealed that six-month commodity pricing for Tesla parts is actually getting cheaper, not more expensive.
He said that commodities are trending lower, giving a hint that inflation has already reached its highest levels.
“We kind of have some insight into which direction prices are going over time and the interesting thing we’re seeing right now is that most of our commodities, most of the things that go into Tesla prices — but not all, more than half — are trending down in six months.”
“That could change, of course, but the trend is downward, which indicates that we are past the peak of inflation.”
Recovering from a period of inflation with commodities heading lower provides fertile ground for recovery in risky assets, including cryptocurrencies. In theory, this comes as a result of lower inflation which means less tightening by the Federal Reserve, providing favorable conditions for risky investments.
If power returns to the markets and crypto outperforms, the trend will be ironic for Tesla, which stripped itself of practically all exposure to BTC — 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 time, and that the decision was not a comment on Bitcoin per se.
In the meantime, the annual meeting produced more optimistic forecasts about the overall economy, including a possible recession in the US that will be “relatively mild” and last nearly eighteen months. Musk added that inflation will “come down fast.”
A higher race in the second half of 2022
The irony in Musk’s comments has not been lost on crypto commentators, and other voices are already betting on a stock rebound that will survive.
Related: Bitcoin Price: Weekend volatility is “expected” with $22,000 stable
Among them is Fundstrat Global Advisors, which this week indicated that markets had historically found a half-year low before the Fed stopped tightening by raising key interest rates.
And so the company predicted that the second half of 2022 could take the S&P 500 index to 4,800 points – a boon for the cryptocurrency markets that are still closely tied to movements in stocks in general.