 ▲ Bitcoin (BTC), U.S. Dollar (USD) |
An analysis suggests that Bitcoin (BTC) investors must confront the structural crisis behind slowing inflation data, as the value of the U.S. dollar is inevitably positioned to decline.
According to cryptocurrency media outlet Cointelegraph on February 14 (local time), digital asset entrepreneur Anthony Pompliano emphasized in an interview with Fox Business that Bitcoin holders should not be shaken by temporary shifts in macroeconomic data. Although the Consumer Price Index (CPI) recently fell from 2.7% in December to 2.4% in January, signaling easing inflationary pressure, Pompliano argued that investors must remain focused on Bitcoin’s fundamental value proposition. He added that the true test for investors will be whether they can continue holding Bitcoin, a supply-capped asset, even when they do not feel the burden of high prices in their daily lives.
Pompliano explained that central banks’ practice of expanding money supply in response to inflation ultimately serves as a decisive driver of Bitcoin’s price appreciation. Defining Bitcoin as a digitally scarce asset limited to a maximum supply of 21 million coins, he analyzed that as more fiat currency is issued, Bitcoin’s relative value inevitably rises. Pompliano asserted that Bitcoin and gold are the most powerful tools for protecting purchasing power over the long term, and if the Federal Reserve continues monetary expansion to address inflation, Bitcoin will become more valuable than ever.
The cryptocurrency market is currently experiencing severe psychological contraction, with key indicators pointing to historically oversold conditions. Pompliano noted that Bitcoin’s price has fallen 28.62% over the past 30 days, trading around $68,850, while the market’s Fear and Greed Index has dropped to 9—its lowest level since June 2022. Although this reflects extreme fear across the market, Pompliano assessed that such a macro environment creates short-term volatility rather than obstructing Bitcoin’s long-term upward trajectory.
The decline of the U.S. dollar is expected to accelerate amid short-term deflationary pressures and monetary policy confusion. Pompliano analyzed that when deflationary forces act on the broader economy, people demand increased money issuance and lower interest rates, a sequence that ultimately results in the depreciation of the dollar. Even if the effects of a weakening dollar do not appear immediately, structural flaws in the monetary system will inevitably fuel the movement of capital toward scarce assets like Bitcoin. He warned that expanding the money supply as a solution to inflation will ultimately undermine the real value of currency.
Ultimately, Bitcoin appears poised to prove its value as the sole ark against a collapsing dollar-based system. Pompliano stressed that investors should trust the mathematical certainty of Bitcoin’s fixed supply rather than reacting emotionally to isolated inflation data points. While the value of fiat currencies fluctuates according to political decisions and monetary policy, Bitcoin is establishing itself as a new standard of trust within the global financial system. He expressed confidence that for those seeking long-term wealth preservation, the clear scarcity offered by Bitcoin represents the most reliable economic answer.
Disclaimer: This article is for investment reference only and the publisher is not responsible for any investment losses incurred based on it. The content should be interpreted for informational purposes only.