Alex Thorn Says Bitcoin Never Crossed $100K When Adjusted for Inflation
The US dollar has lost 20% of its value since 2020, eroding purchasing power across the economy. With consumer prices now 1.25 times higher than four years ago, investors are reassessing the real value of assets like Bitcoin. The cryptocurrency’s inflation-adjusted performance tells a different story from its headline figures.
The Consumer Price Index (CPI) shows prices have climbed by roughly 20% since 2020. This means a dollar today buys only 80% of what it could back then. The weakening currency has fuelled the so-called debasement trade, where traders shift into assets expected to retain or grow in value as fiat money declines.
Bitcoin, often seen as a hedge against inflation, has not escaped the dollar’s slide. Its all-time high of $126,000, when adjusted for 2020 dollars, actually peaked at $99,848, according to Alex Thorn, head of research at Galaxy. The cryptocurrency’s volatility remains tied to broader economic shifts, complicating assessments of its true worth. Looking ahead, Bitcoin’s inflation-adjusted value in 2025 will depend on its nominal price and cumulative inflation. Using a projected 2025 price of $88,000 and an 18% inflation rate since 2020, its real value would drop to about $74,600 in 2020 dollars. This adjustment highlights how currency devaluation reshapes perceptions of asset performance. The US Dollar Currency Index (DXY) has also fallen sharply this year, hitting a three-year low of 96.3 in September. The decline underscores the broader trend of dollar weakness, pushing more investors toward alternatives like Bitcoin.
Bitcoin’s real value, when measured against the dollar’s 2020 purchasing power, falls short of its nominal highs. Investors accounting for inflation gain a clearer picture of its actual performance in today’s economy. The ongoing decline of the dollar continues to reshape how assets are evaluated.
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