Musk predicts Bitcoin slide

Finanzen.net Musk predicts Bitcoin slide 3 hours • 3 minutes reading time The year 2024 was extremely positive for cryptocurrencies such as Bitcoin & Co. Now, of all people, crypto advocate Elon Musk predicted a price slide for the original cyber currency. This is what is behind it. Cryptocurrencies such as the cyber currency Bitcoin have had a successful year in 2024. Spot ETFs for the cryptocurrencies Bitcoin and Ethereum were approved for the first time in the USA, Bitcoin completed its fourth halving and exceeded the 100,000 US dollar mark for the first time. The digital currencies were particularly boosted by Donald Trump's election victory as US President, as he had successfully positioned himself as a crypto-friendly presidential candidate and crypto enthusiasts hope that he will adopt crypto-friendly policies. Elon Musk provides tailwind The fact that Trump received strong support from crypto advocate and Tesla boss Elon Musk certainly helped. In November 2024, Trump announced that he was planning to set up his own ministry to increase government efficiency, which Musk would head together with Vivek Ramaswamy. The name of the ministry: Department of Government Efficiency, or D.O.G.E. for short, is an allusion to the fun cryptocurrency Dogecoin, which Musk helped to achieve great success in the past through open support. In 2024, Dogecoin was able to stage an even steeper rally than Bitcoin. While the original cyber currency gained 114.58 percent in 2024, the memecoin even recorded an increase of 253.37 percent. Now that Trump has taken office and has already implemented his first plans, crypto supporters hope that the positive development of Bitcoin & Co. will continue. But Elon Musk of all people recently took the wind out of their sails by predicting a drop in the price of Bitcoin. D.O.G.E. could cause Bitcoin price to slide This is related to the DOGE Ministry under Musk's leadership. This ministry is committed to reducing the enormous US national deficit, as the United States' debt has increased dramatically in recent years and was estimated at $34 trillion in early 2024, according to Forbes. One of the reasons for this was the corona pandemic and the subsequent stimulus measures. These in turn led to a rapid rise in prices, so that inflation temporarily rose to over ten percent, which led the US Federal Reserve to strictly tighten key interest rates, which drove up interest payments on debt. However, increasing inflation has also given cryptocurrencies such as Bitcoin a strong tailwind in the past, as numerous investors rely on cyber currencies to protect their savings from dollar inflation, similar to how traditional investors rely on gold as an inflation hedge. Conversely, however, this also means that falling inflation could have a negative impact on the Bitcoin price. Musk recently pointed this out in an X post: "When dollar inflation is resolved, the price in dollars for buying cryptocurrencies will actually fall, all other things remaining the same. What counts is the dollar-to-crypto ratio," said Musk. Musk responded in response to an X post by Y Combinator CEO Garry Tan, who predicted a further upswing in the Dogecoin price in 2025 if Musk's ministry successfully manages to reduce government spending. Now it remains to be seen whether Musk will actually succeed in reducing US debt and how this will actually affect Bitcoin, Dogecoin & Co. Editorial team finanzen.net