Crypto: Bitcoin Holders Are Being Tested As Inflation Eases: Pompliano
Bitcoin will become “more valuable than ever” after deflation stops covering “up the impact" on the US dollar, according to Bitcoin entrepreneur Anthony Pompliano.
Bitcoin investors are being forced to rethink why they hold the asset as inflation data cools, according to Bitcoin entrepreneur Anthony Pompliano.
“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?” Pompliano said during an interview with Fox Business on Thursday. “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,” he said.
“Bitcoin and gold are great long-term things,” he said. The Consumer Price Index (CPI) fell to 2.4% in January from 2.7% in December, according to the Bureau of Labor Statistics. However, Mark Zandi, Moody’s chief economist, recently told CNBC that inflation “looks better on paper than in reality.”
Bitcoin (BTC) is typically seen as a hedge against inflation because only 21 million coins will ever exist. When central banks increase the money supply and the value of fiat currencies declines, investors often turn to perceived riskier assets, such as Bitcoin, to protect their purchasing power.
It comes as sentiment for Bitcoin has reached multi-year lows not seen since June 2022, with the Crypto Fear & Greed Index, which measures overall crypto market sentiment, posting an “Extreme Fear” score of 9 in its Saturday update.
Bitcoin is trading at $68,850 at the time of publication, down 28.62% over the past 30 days, according to CoinMarketCap.
Pompliano said the macro environment could create short-term volatility for Bitcoin before it resumes its upward trajectory.
“We’re going get deflationary-type forces in the short term, people are going to ask to print money and to drop interest rates,” he said.
He explained that this will lead to the devaluation of the US dollar, though the effect won’t be immediately visible.
Source: CoinTelegraph
