Bitcoin entrepreneur Anthony Pompliano said cooling inflation is forcing investors to reassess why they hold bitcoin.
Inflation cools, conviction gets tested
Pompliano said on Fox Business that bitcoin’s inflation-hedge narrative is harder to lean on when price pressures aren’t front and center.
Pompliano said during the interview:
“I think the challenge for Bitcoin investors, can you hold an asset when there is not high inflation in your face on a day-to-day basis?”
He added:
“Can you still believe in what Bitcoin’s value proposition is, which is that it’s a finite-supply asset. If they print money, Bitcoin is going higher.”
The U.S. Consumer Price Index fell to 2.4% in January from 2.7% in December, according to the Bureau of Labor Statistics.
Sentiment hits multi-year lows
The downturn has coincided with weak sentiment.
Bitcoin’s Fear & Greed reading has dropped to “Extreme Fear,” with a score of 9.
That aligns with bitcoin’s recent slide, with the asset down about 28% over the past 30 days and trading near $68,850 at publication.
‘Monetary slingshot’ and the dollar
Pompliano argued deflationary forces could drive near-term volatility, as pressure builds for rate cuts and more money printing.
He said:
“The currency is going to be devalued at a time where deflation covers up the impact, so I call it a monetary slingshot.”
