Last week, Tesla CEO Elon Musk announced in a letter to company executives about the impending layoffs a global hiring freeze. The richest man in the world would have justified this decision by a very bad feeling concerning the economy with a recession which seems to be on the horizon. The news, which impacted Tesla’s stock, quickly spread through the cryptosphere, which feared the worst. Details in the following.
Musk’s concerns shared by economists
Before the letter announcing his gloomy forecasts for the economy, Elon Musk had already sent another to the employees of the company in telework to demand the return of the latter. This first communication was already an illustration of the fears of the CEO of Tesla concerning the repercussions of a future economic collapse on the activities of the automaker. A few days before the second letter, Jamie Dimon, CEO of JPMorgan Chase, said that the US economy was facing major problems that were leading it towards a new crisis.
Other economists also shared Musk’s concerns, predicting that the United States will enter a recession due to rising food and gasoline prices. “Will they be able to act as aggressively as necessary? Clearly, Elon Musk doesn’t think they can do this without plunging the economy into a deep recession. said Fiona Cincotta, senior financial markets analyst at City Index London. Automotive specialist at NordLB, Frank Schwope said he would be wise to take the words of the CEO of Tesla as a warning.
What consequences for the cryptocurrency market?
As the cryptocurrency market has shown a strong correlation with the stock market in recent months, a further drop in prices is quite possible. As a reminder, economic turmoil has already had a negative impact on cryptocurrencies this year. Rising inflation also prompted the Federal Reserve to tighten monetary policy.
This move has historically been unfavorable to risky markets like bitcoin. It is not foolish to think that Musk’s pessimistic exit on the economy is likely to worsen the situation in the crypto markets. Needless to say that the tweets of the person concerned have already impacted the operations of some cryptocurrency investors in the pastespecially individuals.
While the cryptocurrency market has remained fairly stable over the past week, US stock futures have dipped further into the red zone. Musk’s comments add additional pressure that could further deteriorate the situation with likely repercussions on the cryptocurrency market.
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Luc Jose Adjinacou
Far from having dampened my enthusiasm, an unsuccessful investment in a cryptocurrency in 2017 only increased my enthusiasm. I therefore resolved to study and understand the blockchain and its many uses and to relay with my pen information relating to this ecosystem.