When inflation is taken under consideration, Bitcoin is just shy of reaching a six-figure milestone, despite the cryptocurrency hitting an all-time high of over $126,000 in October, says Galaxy research director Alex Thorn.
“If you adjust the Bitcoin price for inflation using 2020 dollars, BTC has never exceeded $100,000,” Thorn said on Tuesday.
“If you’ll be able to imagine it, the height in 2020 was actually $99,848.”
Thorn said his adjusted price high for Bitcoin (BTC) was liable for the gradual decline within the purchasing power of the Consumer Price Index (CPI) in all inflation data from 2020 to this point.
The CPI measures inflation through the costs of a basket of products and services and is calculated by the U.S. Bureau of Labor Statistics to trace changes in spending patterns.
The agency reported in November that the CPI rose 2.7% on a non-seasonally adjusted basis over the past 12 months, reducing the purchasing power of the dollar, which has lost about 20% of its value since 2020.
Calculated in dollars in 2020, BTC didn’t reach six figures. Source: Galaxy Research
Inflation within the USA stays high
Today, goods prices are 1.25 times higher than they were in 2020, in accordance with CPI, and a dollar today can only buy about 80% of what it could buy back then.
Inflation within the U.S. skyrocketed to over 9% in mid-2022 in the course of the COVID-19 pandemic and stays above the Federal Reserve's 2% goal.
The dollar index crashes in 2025
The U.S. dollar's decline has accelerated this yr, as measured by the Dollar Currency Index (DXY), which compares the U.S. dollar to a basket of worldwide currencies.
According to TradingView, the DXY has fallen 11% year-to-date to 97.8. The index hit a three-year low of 96.3 in September and has been on a downward trend since October 2022 because the dollar loses ground against other currencies.
This has led to “devaluation trading,” an investment strategy by which traders purchase assets that they imagine will maintain or increase in value as fiat currency loses purchasing power.
