Science

Elon Musk sold his bitcoins at the most inopportune moment?

On the occasion of presenting his strategic reports to his shareholders, Elon Musk returned to the overall financial situation and economic outlook. Being able to hesitantly admit that a company’s bitcoin sale in the second quarter of 2022 may not have been the idea of ​​the century.

The worst (probably) is not yet ahead

It was August 5, during the annual meeting of Tesla shareholders. On this occasion, Elon Musk stated that, according to him, if an economic recession is to be feared in the United States, then in the end it can only be “mild to moderate.”

In other words, Musk seems to believe that while the situation is dire, it is far from hopeless. In any case, this is a far cry from previous crises that the US economy has been able to weather in recent decades. In this regard, the regular actions of the Fed to tighten rates can demonstrate their effectiveness. The key point is inflation, which will eventually be contained and returned to an acceptable level.

Another indicator, the price of materials and spare parts for the next 6 months. According to the billionaire, the outlook is less bleak than we could have imagined just a few weeks ago.

“We have sort of a snapshot of where prices are moving over time. And the most interesting thing that we are seeing now is that most of our raw materials, most of the things that go to Tesla – not all of them, more than half of the prices – are falling in six months.

In other words, Elon Musk believes that “peak inflation” could have been exceeded. And, if exposed in this way, all this information is good news, it can leave a bitter aftertaste for the businessman who sold 75% of Tesla’s bitcoins a few days ago.

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Selling bottom, universal curse

You can be a leader and far-sighted in finances, and just like a beginner on Sunday, buy at the highest price and sell at the lowest. So we will have, for example, a touching thought about Ark Finance boss Cathy Wood, who sold her Coinbase ($COIN) shares at $52 (purchase price of $254, or 82% loss)… a few days before the announcement of the Coinbase partnership -Blackrock, which was accompanied by a 40% price bounce.

Then we are talking about “selling at the bottom”, i.e. the low point of the market during the cycle. And, you see, it can happen to the best, including the richest man in the world. Indeed, after an economically disastrous and geopolitically troubling first half of 2022, it is now possible that the worst is behind us, judging by Tesla’s boss’s very perception. The key is the economic horizon, which could brighten amid relatively controlled inflation, a recovery in growth, or even a gradual recovery in money printing.

In short, a context that is likely to restore strength in the financial and stock markets. And, especially, to the so-called “risk” asset classes, symbolic of which are… Bitcoin and cryptocurrencies.

Elon Musk has detailed why he sold most of his war chest for bitcoin. Now the coming year should allow it to be determined whether it has thus determined, with astonishing accuracy, the worst time to do so.

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