Bitcoin investors are rethinking the asset’s role as inflation cools, according to Bitcoin entrepreneur Anthony Pompliano. He told Fox Business that a softer inflation backdrop raises questions about Bitcoin’s value proposition as a finite-supply asset, especially if central banks continue to pursue accommodative policies. With January’s Consumer Price Index (CPI) cooling to 2.4% from 2.7%, the macro narrative is shifting and traders are weighing how long the inflation narrative can sustain crypto’s narrative as a hedge. The current price action mirrors a cautious mood within the market, as Bitcoin has retreated over the past month while sentiment remains subdued.

Key takeaways

• January CPI came in at 2.4% year over year, down from 2.7% in December, signaling a softer inflation backdrop.
• Bitcoin’s sentiment measure has slipped to multi-year lows, with the Crypto Fear & Greed Index signaling “Extreme Fear” at a recent reading.
• The flagship cryptocurrency is trading around the mid-to-upper $60 thousands, after a roughly 28% decline in the last 30 days.
• The U.S. dollar’s strength has cooled, with the dollar index down about 2.3% over the past month, reflecting shifting macro dynamics.
• Pompliano outlined a “monetary slingshot” thesis: as the dollar devalues and deflationary pressures surface in the near term, Bitcoin could gain longer-term value even if near-term volatility persists.

Tickers mentioned: $BTC

Sentiment: Bearish

Price impact: Negative. Bitcoin’s price has fallen roughly 28% over the past month as macro concerns and sentiment weigh on risk assets.

Market context: In a broader macro context, inflation data and policy expectations continue to shape appetite for risk assets, including crypto. Traders are watching how central banks respond to evolving growth signals, while crypto-specific catalysts compete with traditional macro forces in steering flows and volatility.

Why it matters

The debate over Bitcoin’s role as a hedge against inflation has long hinged on the premise that a fixed supply will preserve value when fiat currencies are debased. Pompliano’s comments underscore the tension between theory and market reality: even as inflation data cools, the path of monetary policy remains uncertain, and investors are wary of premature conclusions about a lasting inflation retreat. In the near term, softer inflation can sap risk premium, potentially slowing the upside impulse for non-fiat stores of value like Bitcoin. Yet the longer-term case for supply-limited assets persists in the eyes of many bulls, particularly if policy makers persist with higher money growth or if inflation surprises to the upside later in the cycle.

The price action around Bitcoin during this period is a reminder that macro-driven volatility remains a defining feature of markets. The asset’s correlation with broader risk sentiment has intensified at times, even as proponents argue that the fixed supply and ever-closer approach to a 21 million cap provide a unique resilience during downturns. The current price backdrop—around $68,850 at publication and a 28% decline over 30 days—illustrates the tug-of-war between inflation awareness and liquidity conditions in crypto markets. The discussion around how monetary policy interacts with digital assets is likely to stay in focus as investors recalibrate what constitutes a hedge in a low-inflation regime that could be reinforced by policy shifts in the months ahead.

Additionally, the commentary around a potential “monetary slingshot” frames Bitcoin as part of a broader debate about how currency debasement and macro policy interact with a new generation of investors. If the dollar softens further in response to renewed expectations for money supply expansion or rate adjustments, Bitcoin could attract fresh inflows as an alternative store of value. That possibility exists alongside the reality that sentiment remains fragile and technicals are unsettled, making immediate directional bets more challenging for casual traders and even some long-term holders.

The impact of macro data on crypto markets is not isolated to Bitcoin. Broader market dynamics—ranging from ETF activity to sentiment gauges—continue to influence the pace and direction of capital into digital assets. Investors are weighing whether the inflation narrative can reassert itself or if structural shifts in the macro environment will redefine how crypto assets behave in risk-off cycles. In parallel, other macro indicators—like the strength or weakness of the U.S. dollar—will help determine whether BTC can sustain any upside or if it remains trapped within a wider risk-off regime.

For readers following the latest data points, the CPI figure and the Fed’s communications are central to the story. While the inflation print itself is a headline, the deeper question is whether the disinflationary trend proves durable or merely a snapshot in a more complex cycle. As Pompliano noted in his remarks, even if inflation cools on the surface, structural changes in policy and global liquidity conditions could continue to shape the narrative around Bitcoin’s long-term value proposition.

In parallel, the market’s mood as reflected by the Crypto Fear & Greed Index and the price movement of Bitcoin underscore a broader caution. The index’s “Extreme Fear” reading suggests that participants are reluctant to push risk assets higher, even when macro data offers a glimmer of relief. Traders will be watching next month’s inflation data, policy statements, and the evolving set of on-chain metrics to gauge whether the current sell-off represents a temporary pause or the onset of a new leg lower.

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According to local reports, Russia’s central bank is re-examining its long-standing opposition to stablecoins. First Deputy Chairman Vladimir Chistyukhin said the Bank of Russia will conduct a study this year on the feasibility of creating a Russian stablecoin. 

Previously, Russia had consistently opposed plans for a centralized stablecoin. However, Chistyukhin said foreign practice now warrants a renewed assessment of risks and prospects.

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Moscow Reopens the Stablecoin Debate

The shift signals a strategic rethink rather than an immediate policy change. Still, the timing is notable.

Over the past year, the United States passed the GENIUS Act, establishing a federal framework for payment stablecoins. 

The law formalized 1:1 dollar backing and reserve transparency requirements. 

As a result, US-backed stablecoins have gained institutional legitimacy and expanded their footprint in cross-border payments and digital asset settlement.

At the same time, the European Union has accelerated work on a digital euro and MiCA-compliant euro stablecoins led by major banks. 

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European policymakers have framed these efforts as necessary to preserve monetary sovereignty and reduce dependence on foreign digital currencies.

Against that backdrop, Russia risks falling behind in the race to shape digital monetary infrastructure. Stablecoins now function as core liquidity rails in global crypto markets and, increasingly, in trade settlement. 

If dollar and euro-backed tokens dominate cross-border flows, Russian entities could face deeper reliance on foreign-regulated instruments.

Sanctions Pressure and the Sovereignty Question

Moreover, sanctions and restrictions on Russia’s access to traditional payment networks add urgency. 

A domestically controlled stablecoin could, in theory, provide an alternative settlement mechanism for international partners willing to transact outside Western systems. 

Even exploring the concept signals that Moscow recognizes the geopolitical dimension of stablecoin infrastructure.

However, risks remain substantial. A Russian stablecoin would require credible reserves, legal clarity, and trust from counterparties. Without transparency and liquidity, adoption would be limited.

For now, the Bank of Russia is studying the issue, not endorsing it.

Hyperliquid price action recently confirmed a breakout from a bullish reversal pattern, supported by a notable uptick in network revenue. 

After rallying to a yearly high of $37.84 on Feb. 3, the Hyperliquid (HYPE) price retraced nearly 18% to $31.06 at the time of writing.

This downtrend coincided with wider weakness across altcoins and majors like Bitcoin (BTC) and Ethereum (ETH), partly driven by a stronger-than-expected U.S. labor market report, which reduced the likelihood of imminent Fed rate cuts. Meanwhile, significant whale selloffs have also hurt its price performance.

Despite the recent price dip, a key network metric suggests that the token could be up for a recovery soon.

Data from DeFiLlama show that the revenue generated by the network over the past week has surged nearly 200% over levels recorded around the end of December. This uptick in revenue follows a spike in commodities futures trading on the platform, especially silver and gold markets.

Increased trading activity directly benefits HYPE holders through its unique buyback and burn mechanism. Notably, the protocol uses 97% of the fees generated by the derivatives trading platform to buy back HYPE from the open market, thereby reducing the available supply, which ultimately helps in supporting the price against volatility. Additionally, if Hyperliquid pairs are used for these trades, the protocol can burn them permanently to further increase scarcity.

There’s also considerable hype around upcoming updates. The Hyperliquid team has teased plans to support outcome trading via the HIP 4 upgrade, a feature that would be useful for the burgeoning prediction markets. A testnet version of HIP 4 is currently live.

On the 4-hour chart, Hyperliquid price has broken out of a falling wedge pattern formed of two descending and converging trendlines. Once confirmed, this pattern has historically been a precursor to staunch rallies.

Calculating a target based on this breakout would put HYPE on a path towards $36.70. This is calculated by adding the height of the pattern to the price at which it broke out of the upper trendline. At press time, this level lies roughly 18% above the current market price.

The MACD indicator appeared to favor the bullish prediction, with the MACD lines pointing steadily upward. At the same time, the Aroon Up was at 71.4% while the Aroon Down sat much lower at 28.57%, suggesting that bulls are still dominating the market direction.

However, it should be noted that broader market sentiment is playing a very important role in gauging market direction at the time, especially as BTC and ETH have been trading sideways this week. 

A sudden spike in volatility or a sharp correction in the majors, as seen earlier multiple times this year, could easily invalidate the bullish narrative and likely force the token back into a consolidation phase.

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.

Bitcoin sentiment has reached multi-year lows

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.

US dollar devaluation will be covered up by “monetary slingshot”

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.

Related: Bitcoin ETFs bleed $410M as Standard Chartered slashes BTC target

“The currency is going to be devalued at a time where deflation covers up the impact, so I call it a monetary slingshot,” Pompiano said.

Pompliano forecasted that the Federal Reserve will continue to expand the money supply to “deal with inflation,” but as the dollar faces further devaluation, he expects Bitcoin to become “more valuable than ever.”

The US dollar index, which tracks the dollar’s strength against a basket of major currencies, is down 2.32% over the past 30 days and is trading at $96.88, according to TradingView. 

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