Inflation Wave Threatens Bitcoin Disinflation Hopes, Bitunix Predicts "Policy Chase" Scenario

Recent research from leading economists at the Peterson Institute and Lazard paints a concerning scenario for Bitcoin bulls. Inflation in the United States is predicted to surge beyond 4% this year, shaking the disinflation narrative long supported by the crypto community. Meanwhile, Bitunix analysts have identified a fundamental risk: the federal government may act too conservatively in cutting interest rates rather than too aggressively—ultimately leading to more drastic policy adjustments.

These projections come as Bitcoin struggles with ongoing selling pressure. With the price currently hovering around $88.28K (down 1.08% in the last 24 hours), the world’s largest digital asset faces a double headwind: changing Fed expectations and a strengthening US dollar showing no signs of slowing down.

Factors of Inflation Exceeding Disinflation Expectations

Researchers from the Peterson Institute and Lazard identify a series of inflationary pressures predicted to outweigh the productivity tailwinds from artificial intelligence. Trump-era import tariffs, an increasingly tight labor market, the potential deportation of large-scale migrants, and a widening fiscal deficit—all converge to push consumer prices higher.

“By mid-2026, the delayed continuation is expected to be substantially completed. This could add 50 basis points to core inflation by mid-year,” their research notes. Delays in passing tariff costs onto end consumers actually prolong inflationary pressures rather than reduce them. Meanwhile, reducing the migrant population through deportation could create labor shortages that push wages higher and increase inflation.

The official inflation rate currently stands at 2.7% for 2025, the lowest since 2020. However, projections jumping above 4% in 2026 indicate a pattern quite different from market consensus a few months ago. Increased government spending and looser financial conditions further complicate the macroeconomic landscape.

Bitunix Identifies “Policy Chase” Risks Ahead

In market analysis, Bitunix has captured an important nuance often overlooked. The crypto market analyst states that the real policy risk is not overly early easing, but remaining too conservative after the structural disinflation from AI productivity gains begins to fully take effect.

“The ‘policy chase’ scenario will force the Federal Reserve to adjust quickly and abruptly after a prolonged cautious period,” Bitunix explains the emerging dynamics. The implication for Bitcoin is higher volatility and a longer consolidation period before a new cycle expansion begins.

Community hopes for a 50-75 basis point rate cut this year now seem overly optimistic. The Fed’s tendency to remain cautious longer means Bitcoin must be patient for the actual policy catalyst.

Fed Reluctant to Be Aggressive, Treasury Yields Surge

The 10-year Treasury yield has hit a five-month high of 4.31%, signaling that the market has already priced in a higher inflation scenario. Rising cost of capital makes high-risk assets like Bitcoin, tech stocks, and NFTs less attractive relative to more predictable government bonds.

Bitcoin fell nearly 4% to $90,000 last week according to CoinDesk data, and this negative momentum continues. Currently, the price is at $88.28K with consistent selling pressure. Every attempt to push resistance near $89,000 is met with selling, preventing a decisive breakout.

The strengthening US dollar and a strong rally in gold (reaching all-time highs), silver, and copper indicate a dominant risk-off rotation. When safe-haven commodities strengthen alongside weakening risk assets, Bitcoin is caught in an unclear position—not a reliable macro hedge, but more akin to a high-beta risk asset.

Disinflation Market Expectations Tarnished

The narrative supporting Bitcoin rallies during 2024-2025 is based on expectations of sustained disinflation and an aggressive Federal Reserve rate cut cycle. Both elements are now undermined by the projections from the Peterson Institute and Lazard research.

If inflation indeed exceeds 4%, the Federal Reserve will be forced to maintain a restrictive stance longer than market fears. This means the rate cut cycle that crypto enthusiasts rely on will be shorter, slower, or possibly not happen at all in the early stages.

Bitunix and other market analysts now interpret these signals as preparation for a deeper consolidation phase. Bitcoin remains 30 percent below its October 2024 peak, reflecting this uncertainty. Until Fed policy expectations shift back to dovish or inflation data shows a substantial decline, bullish momentum will be hard to form.

Takeaway: Patience Before the Next Acceleration

Higher inflation projections alter crypto investors’ calculations. Instead of quick disinflation and Fed cuts, the market now must consider a more cautious Fed scenario and possibly overestimate the structural disinflation from AI.

Bitcoin’s journey to higher levels will require new validation: either real inflation data must decline significantly, or the Fed must signal a clear and explicit dovish stance. Until then, Bitunix and other analysts see limited volatility with psychological resistance at $89,000-$90,000 and support levels that need closer attention.

With current conditions, Bitcoin at $88.28K awaits a reversal momentum that is not yet clearly visible on the horizon. Higher inflation, higher yields, and a more conservative Fed—an unfavorable combination for digital assets that grow within a loose stimulus environment.