#اخبار_الكريبتو_العاجلة #عملات_رقمية #اقتصاد_رقمي #wct
The price of Bitcoin peaked in October at $126,000, which is equivalent to only $99,848 when adjusted for the value of the dollar in 2020, falling short of the $100,000 barrier by $152.
The US dollar has lost about 20% of its purchasing power since 2020 due to ongoing inflation pressures.
Galaxy Research revealed that cryptocurrencies have never reached a historic level $XRP exceeding six figures in terms of real purchasing power. A new analysis conducted by the company indicates that the massive rise of Bitcoin to $126,000 in October was not as psychologically significant as many believed. The cryptocurrency only reached an all-time high of $99,848 after adjusting for the dollar value in 2020, which is still $152 below the required level that exceeds six figures.
Alex Thorn, head of research at Galaxy, announced this finding on Tuesday, explaining why the all-time nominal high for Bitcoin has decreased when adjusted for dollar depreciation. The analysis considers the decline in the Consumer Price Index's purchasing power with each inflation reading from 2020 to date, providing a realistic view of true value.
The purchasing power of the dollar has significantly declined.
Since 2020, the United States has faced significant inflation, with the dollar losing about 20% of its purchasing power. According to the Consumer Price Index, prices today are 1.25 times higher than they were in 2020, meaning that the dollar today only buys 80% of what it could in 2020.
During the COVID-19 pandemic in mid-2022, inflation rose to over 9%, and it remains above the Federal Reserve's target rate of 2%. A Consumer Price Index report released in November showed that inflation increased by 2.7% over the past twelve months, indicating ongoing difficulties faced by American consumers and investors.
The dollar index has decreased by 11% since January, reaching 97.8, after hitting a three-year low of 96.3 in September. This decline in currency value has contributed to what is known as a currency devaluation-based trade policy, as investors are turning to buy assets that retain their value amid the declining viability of fiat currencies.
The performance of Bitcoin, after adjusting for inflation, underscores the necessity of considering real returns instead of nominal returns to assess investment performance over many years.
The performance of Bitcoin, after adjusting for inflation, underscores the necessity of considering real returns instead of nominal returns to assess investment performance over many years.
Bitcoin is currently trading at around $87,317, which is a very low price compared to its peak in October, as markets are affected by multiple economic pressures, such as ongoing inflation concerns. Thorn's analysis highlights the importance of traditional financial metrics in considering currency depreciation to provide accurate historical comparisons and realistic performance assessments.$SOL
