Bitcoin may have traded above $126,000 in October, but according to Alex Thorn, global head of research at Galaxy Digital, its real value — once adjusted for inflation — never surpassed the six-figure threshold.
“When adjusting the price of bitcoin for inflation using 2020 dollars, BTC never hit $100K,” Thorn mentioned in a post on X. “It reached a peak at $99,848 in terms of 2020 dollars.”
Thorn highlights the distinction between nominal and real prices. The nominal price indicates what bitcoin cost at that time, expressed in that year’s dollars. Conversely, the real price adjusts for inflation, providing a clearer view of the asset’s purchasing power relative to a constant year like 2020.
Why select the beginning of 2020 as a reference point? Thorn noted that this was right before the Fed’s major printing in response to Covid.
Possible takeaways
This information could provide insights for both bulls and bears. Bulls might argue that bitcoin’s ascent from the lows of 2022 isn’t as explosive as previously believed. This may indicate significantly less speculation at that nominal $126,000 peak in October and more potential for continued bullish movement.
Bears, however, could contend that bitcoin’s weaker performance when adjusted for inflation suggests the asset isn’t fulfilling its promise as a hedge against currency devaluation. They might recommend sticking with gold, though the yellow metal — currently on a strong trajectory — has faced its own challenges in outpacing inflation over recent decades.
