Bitcoin nearly reached a significant six-digit milestone when adjusted for inflation, even though it soared to an all-time high of over $126,000 in October, according to Alex Thorn, head of research at Galaxy.
“When you adjust Bitcoin’s price for inflation using 2020 dollars, it never surpassed $100,000,” Thorn stated on Tuesday.
“In fact, it reached a peak of $99,848 in 2020 dollar terms, if you can believe it.”
Thorn explained that his adjusted price high for Bitcoin (BTC) reflects the decrease in purchasing power indicated by the Consumer Price Index (CPI) across all inflation reports from 2020 to the present.
The CPI gauges inflation by tracking the prices of a selection of goods and services, calculated by the US Bureau of Labor Statistics to observe shifts in spending patterns.
The bureau reported in November a 2.7% increase in the CPI over the past year, not seasonally adjusted, reflecting a decrease in the dollar’s purchasing power, which has dropped approximately 20% since 2020.
US inflation remains high
Currently, the cost of goods is 1.25 times greater than it was in 2020, according to the CPI, and a dollar today buys about 80% of what it could back then.
Related: Bitcoin seeks liquidity as US CPI inflation drops to its lowest since 2021
US inflation soared above 9% in mid-2022 due to the COVID-19 pandemic and remains above the Federal Reserve’s target of 2%.
Dollar Index plunges in 2025
Declines in the US dollar have accelerated this year, as reflected by the Dollar Currency Index (DXY), which compares the US dollar against a variety of global currencies.
The DXY has dropped 11% since the start of the year, currently standing at 97.8, according to TradingView. The index reached a three-year low of 96.3 in September and has been on a downward trajectory since October 2022, as the dollar loses value compared to other currencies.
This has sparked the “debasement trade,” an investment approach where traders acquire assets they believe will maintain or increase value as fiat currency loses purchasing power.
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