Tesla CEO known for his pro-crypto stance Elon Muskannounced that it expects more economic difficulties in the coming months. These expectations of Musk probably point to a negative trend for the cryptocurrency markets.
According to a report by Reuters, Elon Musk stated in a mail to his executives that he has a “super bad feeling” about the economy. In the light of all these negative developments, Tesla plans to reduce its current workforce by 10%.
According to an SEC filing, the electric car giant has around 100,000 employees by the end of 2021. A 10% cut would mean at least 10,000 job cuts.
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But the Tesla CEO’s economic forecast could mean more problems for the markets. While the crypto markets remained somewhat stable in light of all these negative developments, US stock futures fell further into negative territory.
Is Elon Musk right? Is the economic environment worsening?
In the midst of the ongoing economic strife, the richest person in the world shared a rather pessimistic forecast. US inflation It has reached a 40-year high this year and is expected to remain high over the medium term.
Elon Musk said last year that he expects a recession until the spring or summer of 2022. Recently, Musk, who condemned the loose monetary policy seen in the last two years, also stated that a recession may not be as bad as initially perceived.
“It’s been raining money on idiots for too long. Some bankruptcies have to happen. – Elon Musk.”
Rising inflation prompted the Federal Reserve to tighten its monetary policy. Such tightening provides an unfavorable environment for risk-driven markets such as crypto. The Fed recently started shrinking its balance sheet, which caused a small dip in the crypto markets.
With rising inflation and higher lending rates, retail investors, the main driver of crypto markets, will have less funds to invest in crypto.
Are crypto markets vulnerable to recession?
With data showing the US economy contracting in the first quarter recently, the crypto market may be poised to experience its first major recession.
Given its close relationship with the stock market, cryptocurrencyThere may be more weakness in prices for The market has already reacted badly to economic fluctuations this year. Bitcoin and Ethereum are trading more than 50% below their record levels.
Much of the cryptocurrency rally throughout 2020 and 2021 has been driven by loose monetary policy, which has now come to an end.
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Disclaimer: What is written here is not investment advice. Cryptocurrency investments are high-risk investments. Every investment decision is under the individual’s own responsibility. Finally, Koinfinans and the author of this content cannot be held responsible for personal investment decisions.