Anthony Pompliano says cooling inflation is prompting Bitcoin investors to reconsider their reasons for holding the asset.
In an interview with Fox Business on Thursday, Pompliano questioned whether investors can stay committed to Bitcoin when inflation is no longer a daily concern. He emphasized that Bitcoin’s core appeal lies in its fixed supply, arguing that if governments continue printing money, the cryptocurrency’s price is likely to rise.
Pompliano added that both Bitcoin and gold remain strong long-term assets.
Recent data from the Bureau of Labor Statistics showed the Consumer Price Index (CPI) easing to 2.4% in January, down from 2.7% in December. Still, Mark Zandi, chief economist at Moody’s, told CNBC that inflation appears “better on paper than in reality.”
Bitcoin is widely regarded as an inflation hedge due to its capped supply of 21 million coins. When central banks expand the money supply and fiat currencies lose value, investors often shift toward alternative assets like Bitcoin in an effort to preserve purchasing power.
At the same time, market sentiment around Bitcoin has fallen to levels not seen in years. The Crypto Fear & Greed Index, which tracks overall mood in the digital asset market, registered an “Extreme Fear” reading of 9 in its Saturday update — the lowest level since June 2022.
Bitcoin was trading at $68,850 at the time of publication, marking a 28.62% decline over the past 30 days, according to CoinMarketCap.
Dollar devaluation may be masked by a “monetary slingshot”
Anthony Pompliano said broader macroeconomic conditions could trigger short-term volatility for Bitcoin before the asset resumes its longer-term uptrend.
He suggested that deflationary pressures may emerge in the near term, prompting calls for money printing and interest rate cuts. According to Pompliano, such measures would ultimately weaken the US dollar, though the impact may not be immediately apparent.
“The currency is going to be devalued at a time where deflation covers up the impact — I call it a monetary slingshot,” he explained.
Pompliano predicted that the Federal Reserve will continue expanding the money supply to manage inflation. As the dollar loses further value, he believes Bitcoin will become “more valuable than ever.”
Meanwhile, the US Dollar Index (DXY), which measures the greenback against a basket of major currencies, has fallen 2.32% over the past 30 days and was trading at 96.88, according to TradingView.
