[rsutphin]

The thing being inflated in inflation is prices. If a currency becomes more valuable, things cost less in that currency. An appreciating currency leads to deflation, all else being equal.

(This assumes you are treating BTC as a currency, which appears to be the OP's intent.)

[kobayashi]

Oh right, of course. Inflation means that the value of currency becomes less valuable. Just a brain fart on my part. Thanks!