Which leads us to something people aren’t thinking about: The value of crypto during inflation.
You can include cannabis in the inflation talk as well, because they have one big thing in common. Cryptocurrencies and cannabis are commodities. And what’s inflating right now?
But first… We’re obligated to address the breakup between Tesla CEO Elon Musk and Bitcoin, and the impact it’s had on the crypto market.
We’ve never seen anybody jawbone asset prices around like Musk does.
Just one tweet can send prices to the moon… Or in this case, the garbage can.
Musk has apparently soured on Bitcoin now, just a few months after he embraced it by putting a bunch of Tesla Inc. (Nasdaq: TSLA)’s cash into it and accepting it as payment for cars.
He’s also been wishy-washy on what he claims as “his favorite crypto” — Dogecoin. From hyping it up and sending it to the moon… to joking about it during his Saturday Night Live appearance…
And now, he’s tweeting out his ideal scenario for Dogecoin — one where it takes the throne as the new king of crypto.
And his response to a tweet regarding selling off Bitcoin? “Indeed.”
And with Bitcoin down nearly $20,000 on the month, the media is eating this up with just about every major network running some version of this story.
But we’ve made our stance on the mainstream media clear… We believe facts and figures — not stories and headlines.
And while Bitcoin’s chart doesn’t look great over the past month, the long-term positive trend won’t break until prices get down to about $30,000.
But as we said above: Bitcoin is a commodity. And when inflation goes up, so do commodities.
What does that mean for crypto during inflation like we’re seeing right now?
Because commodity prices rise during inflation, typically this sector is the perfect hedge. Does that rule still apply to cryptos?
The most hardcore of Bitcoin proponents would say yes.
The reality is Bitcoin is far too volatile to be a safe hedge, and the analysts at Bloomsberg Businessweek seem to agree. Yes, cryptocurrencies have seen huge jumps, at many points outpacing inflation.
But if something as simple as a tweet from Elon Musk can send Bitcoin and the whole crypto market plummeting… That’s not a hedge you want.
Especially when other commodities are tied to a hard asset.
We don’t think that means Bitcoin is done. Trading crypto during inflation could still be a good move. And as volatile as BTC is, it’s still the king of crypto. No matter what the media tells you.
All the best,
P.S. Trading expert and Wall Street legend Chuck Hughes has been helping traders bank huge profits for a while…
But now he’s trying something different… A new method that was able to turn $5,900 into $212,217 in just two years.
So how does Chuck want to spend his summer?