Recent analysis from Alex Thorn, head of research at Galaxy Digital, reveals that Bitcoin’s all-time high of over $126,000, reached in October 2025, was misleadingly inflated when considering the impact of inflation. When adjusted for inflation, Bitcoin’s peak value is calculated to be only $99,848 in 2020 dollars, a stark contrast to the much-hyped $100,000 mark.
This perspective on Bitcoin’s historic price surge offers a different narrative about the cryptocurrency’s market movements, particularly as it relates to the changing value of the US dollar. With inflation significantly eroding the dollar’s purchasing power over recent years, Bitcoin’s peak does not reflect the same level of market performance as previously believed.
Understanding Inflation’s Role in Bitcoin Valuation
Thorn’s calculations take into account the Consumer Price Index (CPI), which tracks the average change in prices paid by consumers over time. Since 2020, the CPI has climbed by approximately 20%, meaning that the US dollar is now worth only 80% of what it was two years ago. This adjustment clearly indicates that Bitcoin’s nominal peak price, although eye-catching, did not actually cross the coveted $100,000 threshold.
As Thorn remarks in a recent tweet, “If you adjust the price of Bitcoin for inflation using 2020 dollars, BTC never crossed $100,000. It actually topped at $99,848, if you can believe it.” Such calculations underscore the importance of considering inflation in financial assessments, particularly when it comes to high-profile assets.
CPI Data Reflecting Rising Costs
According to some reports, the CPI has risen by 2.7% in the past year, further diminishing the purchasing power of the US dollar. Goods are now estimated to be 1.25 times more expensive than they were in 2020, amplifying the discourse on the impact of inflation on investments, including cryptocurrencies like Bitcoin. While the cryptocurrency has often been viewed as an inflation hedge, Thorn’s findings suggest a more nuanced understanding is needed.
Despite Bitcoin reaching a record nominal value, this adjustment challenges perceptions of its worth in relation to the dollar’s decline. A $126,000 Bitcoin may appear monumental at first glance, yet with inflation taken into account, the reality is notably different.
The USD’s Decline and Market Trends
As the US dollar continues to weaken, evidenced by an 11% drop in the US Dollar Currency Index (DXY) since the start of 2025, investors are increasingly turning to what is referred to as the ‘debasement trade.’ In this context, assets that retain their value or appreciate are sought after, as fiat currencies struggle against inflation.
Bitcoin, being a decentralized digital asset, is often cited as a possible safeguard against inflation. However, Thorn’s adjusted analysis serves to remind investors that nominal prices can be deceiving, particularly amid shifting economic landscapes.
Bitcoin’s Outlook Amid Economic Headwinds
Bitcoin’s price history has been marked by dramatic fluctuations, often correlating closely with broader economic conditions. The record highs seen during 2025 drew considerable interest, yet investors are urged to examine these figures against inflation to appreciate the true economic context.
With rising inflationary pressures impacting the economy and a continued weakening of the US dollar, the actual value of Bitcoin might be more modest than its highest nominal price suggests. Understanding these dynamics can provide investors with deeper insights into Bitcoin’s real purchasing power and help frame their investment strategies moving forward.
