Bitcoin Nears $100K Adjustment When Inflation Is Considered
Despite Bitcoin reaching an all-time high of over $126,000 in October, recent analysis indicates that when adjusted for inflation, the cryptocurrency has not crossed the $100,000 threshold. Galaxy Research’s head of research, Alex Thorn, explains that accounting for inflation in 2020 dollars reveals Bitcoin’s true inflation-adjusted peak was below this benchmark.
Key Takeaways
- Bitcoin’s nominal peak surpassed $126,000 in October 2023.
- Adjusted for inflation, Bitcoin’s highest value in 2020 dollars was approximately $99,848.
- The Consumer Price Index indicates a 2.7% inflation increase over the past year, diminishing the dollar’s purchasing power.
- The US dollar has lost about 20% of its value since 2020, impacting how Bitcoin’s value is perceived in real terms.
Tickers mentioned: Bitcoin
Sentiment: Neutral
Price impact: Negative. When considering inflation, Bitcoin’s real value did not reach the six-figure mark, highlighting the importance of inflation-adjusted analysis.
US Inflation and Dollar Deterioration
According to official data, the Consumer Price Index—a measure of inflation based on the cost of a basket of goods—showed a 2.7% increase over the last year. This modest rise, however, belies the broader loss of purchasing power of the US dollar, which has declined by approximately 20% since 2020. Consequently, while Bitcoin’s nominal price soared, its inflation-adjusted value tells a different story.
The US Dollar’s Decline Continues
In 2025, the US dollar index (DXY) has fallen approximately 11% since the start of the year, reaching a three-year low of 96.3 in September and continuing its downtrend since October 2022. This decline has fuelled the “debasement trade,” where investors rotate into assets they believe will retain or increase in value as fiat currency loses purchasing power.
As dollar weakness persists, many anticipate that cryptocurrencies like Bitcoin could benefit from the ongoing devaluation, positioning them as potential hedges against inflation and currency debasement. While Bitcoin’s nominal rally remains impressive, its real purchasing power, when adjusted for inflation, suggests a more cautious perspective on its true value in a changing macroeconomic landscape.
