Bitcoin Investors Face a Rethink as Inflation Eases, Says Anthony Pompliano
By [Author Name] – February 14 2026
Overview
In an interview with Fox Business on Thursday, Bitcoin entrepreneur Anthony Pompliano warned that a declining inflation backdrop could force crypto investors to reassess the primary narrative that has underpinned Bitcoin’s appeal – its role as an inflation hedge. The remarks come at a time when the U.S. Consumer Price Index (CPI) slipped to 2.4 % in January, down from 2.7 % in December, and market sentiment toward Bitcoin has sunk to levels not seen since mid‑2022.
Inflation Data and Market Reaction
- CPI decline: The Bureau of Labor Statistics reported a 2.4 % year‑over‑year increase in the CPI for January, marking the first sub‑2.5 % reading in the past year.
- Economist view: Moody’s chief economist Mark Zandi told CNBC that, while the headline number appears improved, “inflation looks better on paper than in reality,” underscoring lingering price‑pressure concerns.
- Bitcoin price: At the time of writing, Bitcoin (BTC) trades around $68,850, a 28.6 % drop over the previous 30 days according to CoinMarketCap.
- Sentiment: The Crypto Fear & Greed Index registered an “Extreme Fear” score of 9, the lowest reading since June 2022, indicating heightened pessimism among traders.
Pompliano’s Core Argument
Pompliano framed the current environment as a “test” for Bitcoin holders. He asked whether investors can continue to justify holding an asset that is marketed as a hedge against high inflation when the macro picture shows easing price pressures. His key points:
- Finite‑supply narrative: Bitcoin’s capped supply of 21 million coins is central to its long‑term value proposition. If fiat money creation persists, the digital asset should appreciate relative to weakening currencies.
- Short‑term volatility: The transition to a lower‑inflation regime may introduce “deflationary‑type forces,” prompting central banks to contemplate additional stimulus or rate cuts. Such moves could temporarily depress Bitcoin’s price before a renewed ascent.
- “Monetary slingshot”: Pompliano coined this term to describe a scenario where a weakened U.S. dollar—driven by ongoing money‑base expansion—remains concealed by short‑run deflationary signals, eventually boosting Bitcoin’s purchasing power.
Macro Context
- U.S. dollar index: The DXY, which measures the greenback against a basket of major currencies, fell 2.32 % over the last month, now sitting near 96.9.
- Federal Reserve stance: Pompliano expects the Fed to keep enlarging the monetary base to “deal with inflation,” a policy that could indirectly benefit Bitcoin by eroding fiat value over the longer term.
- Related market dynamics: Recent data show Bitcoin‑focused ETFs experienced net outflows of roughly $410 million, reflecting broader risk‑off sentiment across the crypto sector.
Analysis
Pompliano’s comments highlight a tension that has resurfaced as inflation trends shift. Historically, Bitcoin’s rally in 2020‑2023 coincided with aggressive monetary easing and rising consumer price pressures, which reinforced its narrative as a store of value. With the CPI now trending lower, the following dynamics merit attention:
- Short‑term price pressure: If the Fed adopts a more dovish posture to pre‑empt a deflationary spiral, liquidity could flow back into risk assets, but the lag in perception may keep Bitcoin depressed initially.
- Long‑term supply‑demand mechanics: The fixed supply remains unchanged. Should the dollar continue to lose purchasing power, Bitcoin’s scarcity could restore its appeal as a digital “gold.”
- Sentiment feedback loop: Extreme fear readings often precede market rebounds. If investors reassess the inflation argument and re‑enter the market on fundamentals, a price correction could ensue.
Key Takeaways
- Inflation cooling challenges Bitcoin’s core narrative – Investors may need to focus more on scarcity and less on short‑term inflation hedging.
- Current price action reflects heightened risk aversion – A 28 % 30‑day decline and “Extreme Fear” sentiment suggest near‑term downside risks remain.
- Macro forces could create a “monetary slingshot” – Ongoing dollar depreciation, masked by temporary deflation, may eventually benefit Bitcoin’s relative value.
- Long‑term outlook stays bullish for many proponents – Pompliano and other long‑term advocates still view Bitcoin as a superior store of value compared with fiat, contingent on continued monetary expansion.
- Watch for policy signals – Further Fed rate adjustments or QE measures will be critical in shaping Bitcoin’s trajectory over the coming months.
The article reflects information compiled from publicly available sources, including the U.S. Bureau of Labor Statistics, CoinMarketCap, TradingView, and statements made by Anthony Pompliano on Fox Business.
Source: https://cointelegraph.com/news/bitcoin-holders-inflation-data-valuation-us-dollar-anthony-pompliano?utm_source=rss_feed&utm_medium=feed&utm_campaign=rss_partner_inbound
