Elon Musk predicts that the cryptocurrency market could fall by 90%: reality or deception?

In a recent statement, Elon Musk –CEO of Tesla and SpaceX– shocked the cryptocurrency community by expressing his concern about the possibility of this market undergoing a significant correction. "If the inflation of the dollar is addressed, the dollar value of cryptocurrencies will actually decrease, all else being equal," he said.

Musk's forecast: the market could drop sharply

Musk's comments focused on the relationship between inflation and the value of cryptocurrencies when converted to US dollars. With falling inflation and a rising dollar, cryptocurrencies –considered a hedge against the devaluation of fiat currencies– could lose some of their appeal. This scenario could lead to a significant correction, with the value of some digital assets dropping by up to 90%.

The main reason for the prediction.

Global economic stability: if central banks successfully control inflation, confidence in fiat currencies will increase, reducing the need to invest in decentralized assets like Bitcoin or Ethereum.

Overvaluation: The cryptocurrency market has repeatedly witnessed sharp corrections after periods of significant growth, and this could happen again.

Effects of economic policy: stricter regulations on cryptocurrencies from major countries like the United States, China, or the European Union could also put pressure on market values.

High volatility of cryptocurrencies

The cryptocurrency market is known for its unpredictable volatility, where sharp price increases or decreases often occur in just a few days. However, experts also warn that Musk's comments –while noteworthy– should be considered with caution.