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Bitcoin reached an all-time high above $126,000 in October, but it never crossed $100,000 when adjusted for inflation using 2020 dollars, according to Galaxy Research.
“If you adjust the price of Bitcoin for inflation using 2020 dollars, BTC never crossed $100,000,” said Alex Thorn, Galaxy’s head of research, on Tuesday. “It actually topped at $99,848 in 2020 dollar terms.”
The analysis highlights how the erosion of dollar purchasing power has altered Bitcoin’s real peak value, with the US dollar losing roughly 20% of its value since 2020.
Thorn’s analysis adjusts Bitcoin’s price using changes in the US Consumer Price Index, which tracks inflation based on the cost of a basket of goods and services.
His calculation accounts for the gradual erosion of purchasing power across each inflation reading from 2020 through today.
According to data from the US Bureau of Labor Statistics, CPI rose 2.7% over the past 12 months as of November, continuing a trend that has significantly weakened the dollar’s buying power. Since 2020, prices are about 1.25 times higher than they were four years ago.
In practical terms, a dollar now buys only about 80% of what it could in 2020. When Bitcoin’s recent peak is viewed through that lens, the psychological six-figure threshold remains just out of reach in real terms, Galaxy Research data shows.
The inflation backdrop remains a key factor shaping market narratives. US inflation surged above 9% in mid-2022 during the COVID-19 era and, while it has cooled, it is still running above the Federal Reserve’s long-term 2% target.
The US dollar has come under pressure in global markets. The Dollar Currency Index, which measures the dollar against a basket of major currencies, is down 11% year-to-date and recently traded near 97.8, according to TradingView.
The index touched a three-year low of 96.3 in September and has broadly trended lower since late 2022.
This combination of persistent inflation and dollar weakness has fueled what traders often call the “debasement trade,” where investors rotate into assets they believe can preserve value as fiat currencies lose purchasing power.
According to Linh Tran, market analyst at XS.com, Bitcoin’s recent price action underscores the market’s sensitivity to monetary policy expectations rather than headline economic data.
While US inflation has eased from last year’s highs, the latest consumer price index reading of 2.7% suggests that the disinflation process remains slow and uneven, forcing “the Fed to maintain a cautious stance, making it difficult to pivot quickly toward an aggressive easing cycle,” Tran said in a note shared with Cryptonews.com.
Last week, K33 said Bitcoin’s prolonged sell-side pressure from long-term holders may be approaching its limits after years of steady distribution.
