Bitcoin entrepreneur Anthony Pompliano says cooling inflation statistics are forcing Bitcoin investors to reconsider why they hold the asset.
“I think the challenge for Bitcoin investors is can you hold onto your assets when you don’t have high inflation on a daily basis,” Pompliano said in an interview with FOX Business on Thursday. “Can you still believe in the value proposition of Bitcoin? It’s an asset with finite supply. If they print money, Bitcoin will go up,” he said.
“Bitcoin and gold are great for the long term,” he said. According to the U.S. Department of Labor’s Bureau of Labor Statistics, the Consumer Price Index (CPI) fell to 2.4% in January from 2.7% in December. But Moody’s chief economist Mark Zandi recently told CNBC that inflation “looks better on paper than it does in reality.”
Anthony Pompliano told Charles Payne on Fox Business Thursday. sauce: fox business
Bitcoin (BTC) is generally seen as a hedge against inflation, as there are only 21 million of them in existence. When central banks increase the money supply and the value of fiat currencies declines, investors often turn to riskier assets such as Bitcoin to protect their purchasing power.
Bitcoin sentiment hits multi-year low
This comes as sentiment towards Bitcoin has hit a multi-year low since June 2022, with the Crypto Fear & Greed Index, which measures overall crypto market sentiment, registering an “Extreme Fear” score of 9 in Saturday’s update.
Bitcoin has fallen 28.14% in the past 30 days. sauce: coin market cap
According to CoinMarketCap, Bitcoin was trading at $68,850 at the time of publication, down 28.62% in the past 30 days.
The devaluation of the US dollar is hidden behind a “currency slingshot”
Pompliano said the macro environment could cause short-term volatility for Bitcoin before it returns to an upward trajectory.
“In the short term, deflationary forces will come and people will print more money and demand lower interest rates,” he said.
He explained that this would lead to a devaluation of the US dollar, but the effects would not be felt immediately.
“I call this a financial slingshot because the currency will be devalued at a time when deflation is masking its effects,” Pompiano said.
Pompliano predicted that the Federal Reserve would continue to expand the money supply to “fight inflation,” but he also predicted that Bitcoin would become “more valuable than ever” in the face of further devaluation of the dollar.
The U.S. Dollar Index, which tracks the dollar’s strength against a basket of major currencies, is down 2.32% over the past 30 days, trading at $96.88, according to TradingView.
