Bitcoin's $126K Rally Never Broke $100K in Real Dollars, Galaxy Digital Says

Bitcoin may have soared past in October, but its true purchasing power never actually crossed the six-figure mark, according to new analysis from . When adjusted for inflation, the cryptocurrency's peak this year topped out at just in 2020 U.S. dollar terms.

Nominal Hype vs. Real Value

, head of research at the crypto merchant bank, highlighted the gap between nominal and real prices in a post on X. “If you adjust the price of bitcoin for inflation using 2020 dollars, BTC never crossed ,” he wrote.

The analysis uses early 2020 as a baseline, a period just before the U.S. Federal Reserve began its massive stimulus programs in response to the COVID-19 pandemic. Since then, U.S. inflation has eroded the dollar's value by approximately . This makes comparing nominal prices across different years misleading for investors trying to gauge an asset's true performance.

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Fodder for Both Bulls and Bears

This inflation-adjusted view offers ammunition for both sides of the crypto trade.

Bulls can argue that the rally from the 2022 lows isn't as parabolic or frothy as the nominal price suggests. The lack of a 'real' milestone could imply that the bull market has significantly more room to run before it's considered overheated.

Bears, however, will see this as evidence that Bitcoin has failed to live up to its reputation as a hedge against monetary debasement. If it can't outperform dollar inflation in real terms during a period of significant money printing, its core value proposition is weakened. They might point to gold, though the yellow metal has also had a mixed record of outpacing inflation in recent decades.