Elon Musk Explains Why He’s Not Selling His Bitcoin Right Now

"I wont sell my Bitcoin" — Musk holds on to his cryptocurrency despite high inflation.

As inflation rates continue to rise at a rate not seen since the early 1980s, Elon Musk has said that he isn’t going to sell his Bitcoin any time soon.

Replying to the CEO of MicroStrategy & notorious Bitcoin investor Michael Saylor on Twitter, Elon Musk told his 78 million followers that owning stocks in companies that produce high quality goods was superior to stockpiling cash. 

He also added that he won’t be selling any Bitcoin, Ethereum or Doge (fwiw: for what it’s worth).

On the back of these tweets, Dogecoin rose 3.9% to $0.11, according to TradingView before falling 1% in the following hours. Bitcoin rose approximately 3.4% before shedding its gains and Ethereum was up a measly 0.3%.

Saylor initially stated that increasing inflation would cause people to run away from cash, debt and value stocks to buy more “scarce” items such as Bitcoin. 

Musk has also said in the past that Bitcoin is less likely to become a currency as it is more suited to being a “store of value”, a status usually assigned to low-risk assets such as gold and treasury bonds

“The transaction value of Bitcoin is low and the cost per transaction is high. At least at its base level, it’s suitable for a store of value. But fundamentally, Bitcoin is not a good substitute for transactional currency.”

Elon Musk – Time Magazine

Unfortunately for both Musk and Saylor, the market hasn’t given much in the way of legitimacy to the thesis that Bitcoin as a stable store of value during times of economic uncertainty.

According to the US Bureau of Labor Statistics, inflation in the United States has already surged from less than 1% to a rate of 7.9% in the past 18 months alone. Despite the rate of inflation skyrocketing further in recent months, the price of Bitcoin has continued to plummet from its all-time-high on November 10 last year. 

Bitcoin 1-Year Chart: CoinMarketCap

For the most part, Bitcoin seems to behave in a similar way to high-growth stocks like Tesla and Shopify, where investors place a high value on the future benefits of the asset or company. Most institutions tend to approach Bitcoin with an “opportunity cost” mentality rather than with a long-term investment strategy. 

Matt Comyn, the CEO of Commonwealth Bank Australia summed up the institutional investment thesis perfectly when he told Bloomberg,

“We see risks in participating, but we see even bigger risks in not participating.”

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