Galaxy Digital "Bitcoin Has Never Exceeded $100,000 on an Inflation-Adjusted Basis"

Although Bitcoin reached an all-time high of $126,000 in nominal terms, an analysis found that when reflecting price increases it actually did not surpass the $100,000 mark. It is pointed out that Bitcoin's historical performance can be interpreted differently on an inflation-adjusted basis.

On the 24th (local time), Cointelegraph reported that Alex Thorn, head of research at Galaxy Digital, said, "When adjusting Bitcoin prices to 2020 dollar values, Bitcoin has never exceeded $100,000." He explained, "The peak on an adjusted basis was only $99,848."

Thorn said this calculation reflects all Consumer Price Index (CPI) releases since 2020, applying the decline in dollar purchasing power progressively. The CPI is an indicator produced by the U.S. Bureau of Labor Statistics that measures inflation levels through changes in the prices of goods and services.

According to the U.S. Bureau of Labor Statistics, the CPI rose 2.7% year-on-year as of last November. Accordingly, the dollar's purchasing power has continuously declined, and the dollar's value is estimated to have fallen by about 20% since 2020. Current price levels are about 1.25 times higher than in 2020, and a present $1 retains roughly 80% of the purchasing power it had then.

U.S. inflation surged past 9% in mid-2022 due to the effects of COVID-19 and has since fallen, but it still exceeds the Federal Reserve's 2% target. This environment has renewed interest in assessing the real value of asset prices.

Meanwhile, the dollar's weakness continues. The dollar index (DXY) has fallen 11% so far this year to around 97.8, and in September it hit 96.3, the lowest in three years. In this trend, investors worried about fiat currency value erosion are once again highlighting the so-called 'debasement trade,' moving into physical assets or crypto assets.