Inflation Magic: Why the $126,000 Bitcoin New High Still "Fell Short of Expectations"

PensionDestroyer · 2026-01-19T09:08:24+00:00

The article points out that Bitcoin's nominal price has broken its all-time high, but its actual value has depreciated due to inflation, and purchasing power is far below expectations. Adjusted for inflation, Bitcoin's real value has never exceeded $100,000, highlighting the difference between nominal and real returns, and suggesting that investors should focus on performance adjusted for inflation when making decisions.

PensionDestroyer

2026-01-19 09:08:24

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The True Value of Bitcoin Is Being Eroded by Inflation

Many people believe that Bitcoin’s breakthrough to a new all-time high of $126,000 in October signifies the creation of genuine wealth, but this judgment overlooks a key factor—depreciation of purchasing power. Calculated in 2020 constant dollars, Bitcoin’s current real value is far below what many imagine.

CPI Is the Invisible Price Killer

Over the six years since 2020, inflation has continuously eroded the purchasing power of the US dollar. The Consumer Price Index(CPI)'s growth means that $100 today no longer buys the same goods as $100 in 2020. This is why, when discussing whether Bitcoin has truly hit a new high, it is essential to consider inflation-adjusted metrics.

The Truth Behind the Data

Adjusting Bitcoin’s historical prices to 2020 dollars to eliminate inflation effects shows that Bitcoin has never crossed the $100,000 threshold. In other words, although the nominal price reached $126,000, after six years of inflation, its real purchasing power has not reached this milestone.

Latest data indicates that the current Bitcoin price is around $93,230, a significant correction from its all-time high. This further demonstrates that measuring asset growth solely by nominal price can be misleading.

How to View This Phenomenon

This perspective reveals an important investment logic: nominal returns do not equal real returns. In a high-inflation environment, rising asset prices may merely be “running to keep up” with declining purchasing power, rather than true value creation. Therefore, when evaluating the long-term performance of assets like Bitcoin, inflation-adjusted real returns are a more accurate reference.

BTC2,05%

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