Imagine an investor back in 2020, dreaming of Bitcoin breaking the $100,000 mark. Five years later, even as the nominal price repeatedly hits new highs, they find that—once inflation is factored in—their dream still hasn’t materialized. This is the sobering reality highlighted in Galaxy Research’s latest analysis. Although Bitcoin reached a nominal all-time high of $126,000 in October 2025, its inflation-adjusted value never actually crossed the psychological $100,000 threshold.
According to data from the U.S. Bureau of Labor Statistics, as of November 2025, the U.S. Consumer Price Index (CPI) rose 2.7% year-over-year. Since 2020, the purchasing power of the dollar has dropped by about 20%. In other words, today’s dollar buys only about 80% of the goods and services it could in 2020.
Bitcoin Price Through the Lens of Inflation
Alex Thorn, Head of Galaxy Research, challenges conventional wisdom with a striking point: Bitcoin has never surpassed $100,000 after adjusting for inflation. His calculation is based on a simple yet often overlooked principle—the time value of money. Thorn used the U.S. Consumer Price Index (CPI) to convert Bitcoin’s nominal price back to its 2020 dollar value. After this adjustment, Bitcoin’s nominal peak of $126,000 in October 2025 equates to just $99,848 in 2020 dollars.
"If you adjust Bitcoin’s price using 2020 dollars, it’s actually never exceeded $100,000," Thorn wrote when sharing this insight on social media. This conclusion pours cold water on the market enthusiasm that focuses solely on new nominal highs.
Erosion of Purchasing Power and the "Devaluation Trade" Narrative
Inflation isn’t a static number—it’s a continuous process that erodes purchasing power. According to the latest data, U.S. CPI rose 2.7% year-over-year in November 2025. While this is a sharp drop from the peak above 9% in mid-2022, it still sits well above the Federal Reserve’s long-term 2% target. This slow but persistent inflation has directly reduced the dollar’s purchasing power. Since 2020, the dollar has lost about 20% of its value, meaning today’s price levels are roughly 1.25 times higher than four years ago. On the international stage, the U.S. Dollar Index (DXY) hovered around 97.86 in late December 2025, marking its lowest level since October 2025. The index fell about 9.3% to 9.7% over the year—its steepest annual decline since 2017.
This combination of "persistent inflation + a weakening dollar" has reinforced the so-called "devaluation trade" narrative in the crypto market. Concerned about the long-term decline in fiat purchasing power, investors are increasingly turning to assets like Bitcoin, which are seen as better stores of value.
A New Balance Between Monetary Policy and Market Sensitivity
The Federal Reserve’s monetary policy remains a key driver of price volatility for assets like Bitcoin. In December 2025, the Fed completed its third rate cut of the year, lowering the federal funds target range to 3.50%–3.75%. Market analyst Linh Tran noted that Bitcoin’s recent price movements have reflected market sensitivity to monetary policy expectations, rather than just economic data. Although inflation has retreated from its highs, the 2.7% CPI reading shows that the fight against inflation is slow and uneven.
This forces the Fed to maintain a cautious stance, making it difficult to pivot quickly to an aggressive easing cycle. Such uncertainty has tightened the link between Bitcoin’s price and macro policy expectations, making the relationship more nuanced and sensitive.
Bitcoin’s Status on Gate’s Market
Bringing the focus back to the present, according to the latest data from Gate on December 29, 2025, Bitcoin’s price stood at $90,064.3, up 2.76% over the past 24 hours.
This price still falls short of Galaxy Research’s inflation-adjusted 2020 dollar peak of $99,848. It clearly shows that, after stripping out the effects of currency devaluation, the Bitcoin market still has ground to cover before truly breaking through the $100,000 "real value" milestone. For investors trading on platforms like Gate, this analysis offers a crucial perspective: sometimes, rising nominal prices are merely a monetary illusion. Genuine wealth growth must go beyond headline numbers and consider changes in real purchasing power.
Bitcoin’s Value Proposition as a Store of Value in an Inflationary Era
Bitcoin is often dubbed "digital gold," with one of its core narratives being its role as a store of value against inflation. However, Galaxy Research’s analysis reveals a subtle truth: even Bitcoin’s dollar-denominated "milestones" are being eroded by the same inflationary forces. This isn’t a dismissal of Bitcoin’s value, but rather an evolution in investment thinking. It reminds investors that, in an inflationary environment, any fiat-denominated "all-time high" must be examined through the lens of purchasing power.
For Gate users, this means that while monitoring price swings, it’s even more important to understand the macro monetary logic behind them. The real-time market data and in-depth analytics tools offered by Gate can help investors see through the illusion of nominal prices and get closer to the true essence of asset value.
As of December 29, the U.S. Dollar Index is struggling around 97.86, with an annual decline close to 10%. Meanwhile, Bitcoin’s price on Gate stands at $90,064.3—a lofty figure, but still short of the inflation-adjusted $100,000 threshold. This serves as a reminder to every market participant: in a world of continuous fiat devaluation, what matters isn’t just how high an asset’s nominal price climbs, but how much purchasing power it truly preserves. Bitcoin’s $100,000 journey may have arrived in nominal terms, but when measured by real value, the destination remains just out of reach.
