Bitcoin’s $100K Milestone Not Yet Achieved with Inflation

Generally, People Think Bitcoin has reached new heights, But Actually, it has not yet surpassed the $100,000 mark when you adjust for inflation, According to a recent analysis by Galaxy Research. Obviously, The erosion of the dollar’s purchasing power over the past few years has changed the real value of Bitcoin’s peak.
Normally, Investors look at the nominal value, But when you adjust for inflation, the picture is different, The analysis shows that Bitcoin’s price has not actually crossed the $100,000 threshold when adjusted for inflation using 2020 dollars.
Basically, The adjustment is based on changes in the US Consumer Price Index (CPI), which tracks inflation based on the cost of a basket of goods and services, So it is a good indicator of the dollar’s purchasing power.
Clearly, Since 2020, the US dollar has lost roughly 20% of its value, meaning that prices today are about 1.25 times higher than they were four years ago, Which is a significant decrease in purchasing power.
Usually, A dollar now buys only about 80% of what it could in 2020, This erosion of purchasing power has significant implications for the real value of Bitcoin’s price, And investors should take this into account.

Nominal Highs vs. Real Value

Apparently, The backdrop 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, Like Bitcoin.
Historically, Bitcoin’s recent price action underscores the market’s sensitivity to monetary-policy expectations rather than headline economic data, So investors should keep an eye on the Fed’s stance.
Generally, Despite US inflation easing from last year’s highs, the latest consumer price index reading of 2.7% suggests that the disinflation process remains slow and uneven, Which is a concern for investors.

Inflation-Adjusted Peak

Normally, The Federal Reserve has to maintain a cautious stance, making it difficult to pivot quickly toward an aggressive easing cycle, Which affects the dollar’s value.
Obviously, The analysis, led by Galaxy’s head of research, Alex Thorn, shows that Bitcoin’s peak in 2020-dollar terms was around $99,848, Which is close to but not quite $100,000.

Dollar Depreciation

Basically, This adjustment is based on changes in the US Consumer Price Index (CPI), which tracks inflation based on the cost of a basket of goods and services, So it gives a good idea of the dollar’s purchasing power.
Apparently, The US dollar has lost value over the past few years, meaning that prices today are higher than they were four years ago, Which affects the real value of Bitcoin.

The “Debasement Trade”

Generally, Investors are looking for assets that can preserve value as fiat currencies lose purchasing power, And Bitcoin is one of them.
Obviously, The market’s sensitivity to monetary-policy expectations rather than headline economic data is a key factor in Bitcoin’s price, So investors should keep an eye on the Fed.

Fed Stance and Inflation Outlook

Normally, The Federal Reserve’s stance on inflation is a key factor in the dollar’s value, And therefore in Bitcoin’s price.
Apparently, The latest consumer price index reading of 2.7% suggests that the disinflation process remains slow and uneven, Which is a concern for investors.

Conclusion

Generally, In summary, although Bitcoin has achieved impressive nominal gains, the impact of inflation means it has not yet truly surpassed the $100,000 milestone in real terms, So investors should be aware of this.
Obviously, As inflation continues to erode the dollar’s purchasing power, assets like Bitcoin may become increasingly attractive to investors seeking to preserve value, Which is a key consideration for investors.

Final Thoughts

Apparently, The relationship between Bitcoin’s price and the dollar’s purchasing power is complex, And investors should take this into account when making decisions.
Basically, The Federal Reserve’s stance on inflation is a key factor in the dollar’s value, And therefore in Bitcoin’s price, So investors should keep an eye on it.
Normally, Investors should be aware of the impact of inflation on the real value of Bitcoin’s price, And adjust their strategies accordingly.