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Tesla founder Elon Musk provided some basic financial advice on Monday as US inflation hits four-decade highs – noting the public should invest in physical assets even as he indicated that he would continue holding riskier bets on cryptocurrencies.
Musk discussed his view on how to handle the difficult financial conditions after asking followers to provide their “thoughts about probable inflation rate over next few years.” Inflation hit 7.9% in February as higher costs for daily necessities such as food and fuel slammed US household budgets.
“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,” Musk tweeted.
The billionaire added that he has no plans to sell his cryptocurrency holdings – despite their reputation as riskier assets that tend to sell off when the market is volatile.
“I still own & won’t sell my Bitcoin, Ethereum or Doge fwiw,” Musk said.
Leading cryptocurrencies briefly spiked following Musk’s remarks before leveling off. As of early Monday morning, Bitcoin was trading flat at $38,912. The prices of ethereum and dogecoin were also flat.
Musk’s initial question on Twitter drew a response from MicroStrategy CEO Michael Saylor, another prominent cryptocurrency who has argued bitcoin is more valuable than gold.
“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,” Saylor wrote.
“It is not entirely unpredictable that you would reach that conclusion,” Musk joked in response.
Musk also touched on his companies’ struggles with inflation, noting the steep prices for commodities during the Russia-Ukraine war.
“Tesla & SpaceX are seeing significant recent inflation pressure in raw materials & logistics,” he wrote.
Musk is a prominent advocate for cryptocurrencies and has helped dogecoin gain traction as a investment following its origin as a meme token. Last May, Musk previously declared last May that he had no plans to sell his dogecoin holdings.
Tesla has also embraced cryptocurrencies under Musk’s leadership. Earlier this year, the electric car maker began accepting dogecoin as a form of payment for some items on its website.
Tesla also bought $1.5 billion worth of bitcoin in early 2021. In an SEC filing, company officials declared they “believe in the long-term potential of digital assets both as an investment and also as a liquid alternative to cash.”
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