As the flagship of the cryptocurrency ecosystem Bitcoin (BTC) tries to hold above $20,000, new data in the global economy is of great importance.
In his statement yesterday, Tesla CEO Elon Musk shared positive views on the global economy. Musk stated that inflationary pressure has begun to decrease and the worst-case scenario may be over. Musk noted that the company's commodity costs will tend to decline over the next six months, adding:
"Inflationary pressure in the global economy is losing momentum. This shows that we have left the worst-case scenario behind in a high inflation disaster. I think inflation will drop rapidly at some point in the future. In this process, we now have a concrete prediction of where prices are going over time. The interesting thing we're seeing right now is that our commodities prices of most, more than half, will tend to fall within six months."
Elon Musk previously claimed that the US economy is probably in a recession and this process could continue for 12 to 18 months. According to Musk, the main cause of inflation is the government's nonstop printing of money. The Fed's interest rate hike and monetary policy also have an impact on the cryptocurrency market.
With inflation in the United States rising to a high in four decades, surpassing 9%, capital is flowing very quickly from the stock and cryptocurrency markets to hedged assets such as bonds and treasury. This is because the Federal Reserve raises interest rates to control inflation, which can negatively affect the rate of economic growth. However, as Elon Musk predicted, outflows from cryptocurrencies may decrease as inflationary pressure subsides. This could also mean that more investors will hold onto their crypto investments and even make new investments in the long run.
Two days ago, the world's largest asset manager BlackRock announced its partnership with cryptocurrency exchange Coinbase. The deal will allow BlackRock to offer crypto investment to its institutional clients. Currently, BlackRock has $10 trillion in assets under management. Even a 5% investment can bring a staggering $500 billion in liquidity to the cryptocurrency market. BlackRock's announcement shows that institutional interest for crypto is growing steadily. Institutional investment is crucial for Bitcoin to rise to new heights.