- Bitcoin‘s all-time high in October 2021 was just under $100,000 when adjusted for inflation to 2020 dollars.
- The Consumer Price Index (CPI) shows U.S. inflation has reduced dollar purchasing power by about 20% since 2020.
- The U.S. dollar has weakened significantly in 2025, with the Dollar Currency Index (DXY) dropping 11% year-to-date.
- Inflation levels remain above the Federal Reserve’s 2% target, despite recent declines from peak levels in 2022.
- The weakening dollar has encouraged investment strategies focused on protecting value from currency depreciation.
In October 2021, Bitcoin reached a record peak price of over $126,000. However, after adjusting for inflation based on 2020 dollar values, the price did not cross the $100,000 mark. Alex Thorn, head of research at Galaxy, stated that the highest Bitcoin Price was approximately $99,848 in 2020 dollars, reflecting the decreased purchasing power of the U.S. dollar since that time. This adjustment accounts for inflation changes calculated using the Consumer Price Index (CPI) from 2020 to the present.
The CPI measures inflation by tracking the cost changes of a standardized basket of goods and services, as calculated by the U.S. Bureau of Labor Statistics BLS. In November, the BLS reported a 2.7% increase in CPI over the past 12 months, indicating ongoing inflation. Since 2020, inflation has lowered the dollar’s value by about 20%, meaning a dollar today buys only 80% of what it could in 2020.
Inflation levels surged above 9% in mid-2022 during the COVID-19 pandemic and still exceed the Federal Reserve’s target of 2%. Meanwhile, the U.S. dollar has weakened significantly in 2025, with the Dollar Currency Index (DXY), which compares the dollar to a basket of global currencies, falling 11% so far this year to 97.8. The index hit a three-year low at 96.3 in September and has trended downward since October 2022, as shown on TradingView.
This decline in dollar value has contributed to what is known as the “debasement trade,” where investors buy assets believed to maintain or grow in value as fiat currency loses purchasing power.
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