Bitcoin’s Milestone Clouded by Inflation: A Close Examination

In October 2025, Bitcoin hit an extraordinary nominal value exceeding $126,000, setting a new historical record. However, when inflation is accounted for, the picture becomes more nuanced. According to Alex Thorn, who leads Galaxy Research, Bitcoin hasn’t truly breached the $100,000 mark when valued in 2020 dollars. Specifically, the inflation-adjusted peak sits only at $99,848, challenging the ideas surrounding Bitcoin’s “real value” within the cryptocurrency market.

How Does Inflation Affect Bitcoin’s Value?

The US Department of Labor’s Consumer Price Index (CPI) reveals that inflation remains a persistent concern. As of November, the annual inflation rate was recorded at 2.7%, indicating that the cost of goods and services has risen by roughly 1.25 times since 2020. Consequently, the purchasing power of a dollar has decreased by around 20%, which means Bitcoin’s record-setting value does not correspond to significant gains in real terms.

Meanwhile, the 2025 US Dollar Index (DXY) showed an 11% drop, landing at 97.8, a sign of the dollar’s depreciation against other global currencies. September’s 96.3 level marked a three-year low. In response, some investors adopt “monetary erosion trade” strategies, looking at limited-supply assets like Bitcoin to act as a bulwark against devaluing fiat money.

What Are Institutional Insights on Current Trends?

In the midst of ongoing debates, VanEck’s evaluations present a unique viewpoint. The firm argues that recent dips in Bitcoin’s value aren’t market crashes but rather natural resets. Despite a decline in on-chain activity and miner engagement, the purge of excessive leveraged positions is seen as beneficial for maintaining liquidity over time. Investor behavior is showing a divide: exits from exchange-traded products are balanced by aggressive Bitcoin purchases for corporate treasuries.

Further adding to market fluctuations are proposed crypto regulations in the US and Europe. Some speculate that due to these regulatory uncertainties, Bitcoin could retreat to the $65,000 range, although long-term holders are keeping faith. This situation is reminiscent of previous cycles characterized by “miner capitulation” and weak risk appetite before eventual price stabilization.

Bitcoin’s inability to reach a $100,000 inflation-adjusted peak gives a more accurate depiction, though it doesn’t diminish its status as a “store of value.” Using real figures rather than nominal ones allows for healthier investment expectations. Key factors continue to buttress Bitcoin’s extended narrative, notably unwavering institutional engagement.

• Bitcoin’s inflation-adjusted peak remains below $100,000.
• The CPI indicates a 20% reduction in dollar purchasing power since 2020.
• Despite a $126,000 nominal value, its real equivalent is underwhelming inflation-wise.

These findings highlight that while Bitcoin’s short-term dynamics are influenced by inflation and regulatory environments, its long-term value proposition is firmly supported by institutional interest and market mechanisms that adapt over time.