Bitcoin’s next move hinges on macro shift as inflation eases: analyst

ProCap Financial chairman Anthony Pompliano predicted Bitcoin will benefit from a “monetary slingshot” as the Federal Reserve prints money to combat deflation.

Speaking on FOX Business, Pompliano said Bitcoin’s value proposition remains intact long-term, but investors must hold through periods when deflation masks currency debasement effects.

Bitcoin (BTC) fell 50% from its $126,000 all-time high to around $70,000 as deflation replaced inflation as the primary economic concern.

Pompliano framed this as a test for Bitcoin holders: “Can you hold an asset when there is not high inflation in your face on a day to day basis? Can you still believe in what Bitcoin’s value proposition is, which is it’s a finite supply asset.”

The analyst urged investors who “liked it at one hundred twenty six thousand, you should love it at seventy thousand.”

Monetary slingshot will devalue currency as deflation fades

Pompliano shared a scenario where money printing to fight deflation will eventually devalue the currency once the economy exits the deflationary period.

“We’re going to print a bunch of money to try to deal with deflation. And all of a sudden, as we come out of that thing, now we’re going to see that the currency has been devalued and Bitcoin becomes more valuable than ever,” he explained.

The timing creates a challenge for Bitcoin investors. Deflation suppresses immediate price action while the Fed implements policies that will benefit Bitcoin long-term.

“If they print money, Bitcoin is going higher over the long run,” Pompliano stated.

Real-time inflation data shows prices declining across categories. Rent has fallen 32 consecutive months while food and gas prices trend downward.

Artificial intelligence replaces jobs faster than expected, adding deflationary pressure. The U.S. economy faces pressure from three forces: tariffs, AI, and robotics, all pushing prices lower.

Bitcoin sold off as deflation overtook inflation concerns

Bitcoin rallied during summer 2025 on tariff-related inflation fears. Google searches for currency debasement spiked last month, benefiting gold and silver.

Bitcoin failed to participate in the rally as deflation replaced inflation as the dominant narrative.

“People were talking about, is inflation coming because of the tariffs? As soon as all of a sudden we realized it’s not coming. Well, do you need to put a ton of your money into Bitcoin if deflation is the bigger risk? And so I think that’s where you see the cooling off of Bitcoin,” Pompliano said.

Gold outperformed through central bank buying rather than retail debasement trades. Foreign central banks move away from all fiat currencies but “are not ready to buy Bitcoin.”