Elon Musk won’t sell his crypto holdings in BTC, ETH, and DOGE

• Elon Musk shares that inflation will be a real pain going ahead but refuses to let go of crypto holdings.
• Michael Saylor responded by saying that as currencies and value stocks fall, capital will move to scarce property like Bitcoin.

The U.S. recently reported a staggering 7.9 percent inflation for the last month of February 2022 hitting a four-decade high. Such high inflation numbers have really got the U.S. government and the Federal Reserve on their heels.

Such as the Fed is preparing to announce its first interest rate hike on Wednesday this week, business tycoon Elon Musk tweeted about the same. Musk asked his Twitter followers late Sunday about their thoughts on inflation for the next few years.

It is likely that risk-ON assets like equity and cryptocurrencies shall be most volatile to inflation. This is because money usually flows to risk-off assets during the high inflationary period. But Musk is not willing to give up his crypto holdings. Sharing his two cents on the matter, the world’s richest man said:

As a general principle, for those looking for advice from this thread, it is generally better to own physical things like a home or stock in companies you think make good products, than dollars when inflation is high. I still own & won’t sell my Bitcoin, Ethereum or Doge fwiw.

Musk’s recent tweet has served as a vote of confidence for long-term crypto investors. The recent crypto market correction has put investors at the edge of their seats. Furthermore, the Russia-Ukraine war has further added to the inflation woes for investors.

Here’s how inflation can affect crypto investors

Many analysts believe that the fundamental nature of crypto is to serve as a hedge to traditional fiat currencies and inflation. However, we have seen crypto making moves largely in resemblance with equity. Furthermore, the extreme volatility puts doubt on Bitcoin’s status as a hedge asset. On-chain data provider Santiment reports:

This week will be big for #crypto and #equities traders, as the #Fed is expected to decide on a quarter-point rate hike this week. Bitcoin & #Ethereum have been pegged to the #SP500 in 2022, and these decisions should impact #cryptocurrencies greatly.

But some of the ardent Bitcoin supporters continue to back the cryptocurrency. Responding to Musk’s tweet, MicroStrategy CEO took the opportunity to pitch for Bitcoin once again. He said:

USD consumer inflation will continue near all time highs, and asset inflation will run at double the rate of consumer inflation. Weaker currencies will collapse, and the flight of capital from cash, debt, & value stocks to scarce property like Bitcoin will intensify.

Michael Saylor’s company MicroStrategy already holds 120,000 Bitcoins on its balance sheet. Even Elon Musk’s Tesla holds a large quantity of Bitcoin. Long-term investors, however, continue to rely on crypto to beat inflation in the long term.