Bitcoin may have hit record highs in nominal terms, but when you adjust for inflation, it has never truly crossed the $100,000 mark, according to Galaxy Research.
Key Takeaways
Bitcoin hasn’t broken $100K when adjusted for inflation.
The US dollar has lost roughly 20% of its purchasing power since 2020, meaning today’s dollars buy less than they did four years ago.
Persistent inflation and a weaker dollar continue to fuel the so-called “debasement trade,” where investors seek assets that preserve value.
Galaxy Research’s head of research, Alex Thorn, explained that despite Bitcoin reaching an all-time high above $126,000 in October, adjusting the price for 2020 dollars shows it never actually crossed six figures.
“If you adjust Bitcoin’s price using 2020 dollars, BTC topped out at $99,848,” Thorn said.
How the Inflation Adjustment Works
Thorn’s analysis uses the US Consumer Price Index (CPI) to account for inflation, tracking the erosion of purchasing power over time. The CPI rose 2.7% in the past 12 months, continuing a trend that has weakened the dollar by roughly 20% since 2020. In other words, a dollar today buys only about 80% of what it could in 2020.
Viewed through this lens, Bitcoin’s recent peaks remain just shy of the psychological $100,000 milestone in real terms.
Dollar Weakness and Market Narratives
Alongside inflation, the US dollar has weakened in global markets. The Dollar Currency Index (DXY), which measures the dollar against major currencies, is down 11% year-to-date, recently trading near 97.8. This combination of inflation and dollar weakness has bolstered demand for assets like Bitcoin, which traders view as a hedge against fiat currency debasement.
Bitcoin Still Sensitive to Fed Policy.
“Even as inflation eases from last year’s highs, the process is slow and uneven,” Tran said. “The Fed is maintaining a cautious stance, which makes it difficult for them to pivot quickly toward aggressive rate cuts.”
Similarly, analysts at K33 suggest that prolonged sell-side pressure from long-term Bitcoin holders may be approaching its limits after years of steady distribution, hinting at potential stabilization in the market.
In short, while Bitcoin may look like it has hit new heights on the charts, adjusting for inflation reveals it hasn’t quite reached the $100K milestone in real terms. Dollar weakness and inflation continue to shape investor behavior, keeping Bitcoin at the center of the “debasement trade.”
