Musk supports Trump, but predicts that cryptocurrency prices will plummet?
Today, the price of Bitcoin plummeted, once approaching $95,000, and a large amount of funds betting on Trump transactions were withdrawn, resulting in the liquidation of $205 million in long positions within an hour. Tesla CEO Musk said that if Trump's new government efficiency department successfully fights inflation, the prices of cryptocurrencies such as Bitcoin and Dogecoin may fall.
Previously, after Musk supported Trump's campaign for the US presidency, the prices of Bitcoin and Dogecoin soared, and traders expected Musk to help Trump establish a government that supports cryptocurrencies. However, now Musk said that if the government efficiency department successfully fights inflation, the price of cryptocurrencies will fall because the purchasing power of the US dollar has increased, reducing the relative value of cryptocurrencies.
In addition, Musk opposes excessive spending in the United States and supports the establishment of a government efficiency department to cut spending. Because the abbreviation of the department is similar to the English name of Dogecoin, its actions have an impact on the trend of Dogecoin. The soaring US debt and runaway inflation are the current economic background, and Musk's movement aims to reduce government spending to fight inflation.
