Burst the bubble: After inflation adjustment, the $100,000 milestone for Bitcoin has never truly been reached

Imagine an investor who in 2020 was dreaming of Bitcoin breaking through $100,000. Five years later, when the nominal price repeatedly hits new highs, he finds that after accounting for inflation, his dream still hangs in the air. This is the harsh reality revealed in Galaxy Research’s latest analysis. Although Bitcoin reached a nominal all-time high of $126,000 in October 2025, its real value, adjusted for inflation, has never truly crossed the psychological threshold of $100,000.

According to data from the U.S. Bureau of Labor Statistics, as of November 2025, the U.S. Consumer Price Index (CPI) increased by 2.7% year-over-year. Since 2020, the purchasing power of the dollar has declined by approximately 20%. This means that today’s one dollar can buy only about 80% of the goods and services it could in 2020.

Bitcoin Price Under Inflation Filter

Linh Tran, head of Galaxy Research, presents a counterintuitive view: Bitcoin has never truly broken the $100,000 mark after inflation adjustment. His calculation is based on a simple yet often overlooked logic—the time value of money. Tran uses the U.S. Consumer Price Index (CPI) to convert Bitcoin’s nominal price back into 2020 dollar value. After this calculation, the $126,000 nominal high in October 2025 is equivalent to only $99,848 in 2020 dollars.

“If you adjust Bitcoin’s price with 2020 dollars, it has actually never exceeded $100,000,” Tran wrote when sharing this finding on social media. This conclusion is like a cold shower, dousing the enthusiasm of those markets that focus solely on nominal price highs.

Purchasing Power Erosion and the “Devaluation Trade” Narrative

Inflation is not a static number; it is a continuous process that erodes purchasing power. According to the latest data, the CPI in November 2025 increased by 2.7% year-over-year. Although this is a significant decline from the peak of over 9% in mid-2022, it remains above the Federal Reserve’s long-term target of 2%. This slow but persistent inflation environment directly leads to a decline in the dollar’s purchasing power. Since 2020, the dollar’s purchasing power has fallen by about 20%, meaning current prices are roughly 1.25 times higher than four years ago. In the international market, the dollar index (DXY) hovered around 97.86 points in late December 2025, the lowest since October 2025. The index declined approximately 9.3% to 9.7% over the entire year of 2025, marking the most severe annual drop since 2017.

This combination of “ongoing inflation + weakening dollar” reinforces the so-called “devaluation trade” narrative in the cryptocurrency market. Investors, worried about the long-term decline in fiat currency purchasing power, are increasingly shifting funds into assets like Bitcoin that are viewed as better stores of value.

New Balance Between Monetary Policy and Market Sensitivity

The Federal Reserve’s monetary policy movements have always been a core driver of price fluctuations in assets like Bitcoin. In December 2025, the Fed completed its third rate cut of the year, lowering the federal funds rate target to 3.50% - 3.75%. Market analyst Linh Tran points out that Bitcoin’s recent price movements more reflect the market’s sensitivity to monetary policy expectations rather than purely economic data. Although inflation has retreated from high levels, the 2.7% CPI reading indicates that the fight against inflation is slow and uneven.

This forces the Fed to maintain a cautious stance, making it difficult to quickly shift to an aggressive easing cycle. This uncertainty makes Bitcoin’s price more closely and subtly linked to macro policy expectations.

Current Status of Bitcoin on Gate

Refocusing on the present, according to the latest market data from Gate Exchange as of December 29, 2025, Bitcoin is priced at $90,064.3, with a 24-hour increase of 2.76%.

This price still shows a significant gap compared to the inflation-adjusted peak value of $99,848 in 2020 calculated by Galaxy Research. It clearly indicates that after removing the effects of currency depreciation, the Bitcoin market still has a way to go to truly reach the “real value” threshold of $100,000. For investors trading on platforms like Gate, this analysis provides a crucial perspective: when evaluating asset performance, nominal price increases can sometimes be just a currency illusion. True wealth growth must go beyond nominal figures and consider changes in actual purchasing power.

The Value Storage Proposition of Bitcoin in the Inflation Era

Bitcoin is often hailed as “digital gold,” with one of its core narratives being its function as a store of value against inflation. However, Galaxy Research’s analysis reveals a subtle fact: Bitcoin’s own “milestones” measured in dollars are also being eroded by the same inflationary forces. This is not a negation of Bitcoin’s value but an upgrade in investment thinking. It reminds investors that in an inflationary environment, any “new high” priced in fiat currency must be examined through the lens of purchasing power.

For Gate users, this means that while paying attention to price fluctuations, they should also better understand the macro monetary logic behind it. The real-time market data and depth analysis tools provided by Gate can help investors cut through the fog of nominal prices and get closer to the true value of assets.

As of December 29, the dollar index struggled around 97.86 points, with a year-to-date decline of nearly 10%. Meanwhile, Bitcoin on Gate is priced at $90,064.3, seemingly high but still not reaching the inflation-adjusted real threshold of $100,000. This reminds every market participant: in a world of continuous fiat depreciation, what matters may not be how high the nominal price of an asset reaches, but how much purchasing power it truly preserves. Bitcoin’s journey to $100,000 may have nominally arrived, but when measured by real value, the destination is still far away.