According to Alec Thorne, head of research at Galaxy, Bitcoin's nominal peak of $126,000 corresponds to approximately $99,848 after adjusting for inflation, meaning it does not reach the six-figure $100,000 mark. Thorne notes that when recalculated in 2020 dollars, BTC "never crossed $100,000," a conclusion based on consistent price adjustments using CPI data. This recalculation accounts for the declining purchasing power of the dollar since 2020 and provides a different perspective on historical highs.
Bitcoin Price Adjusted for Inflation
Galaxy recalculated Bitcoin's all-time high using methods based on the Consumer Price Index. After this adjustment, the $126,000 peak is equivalent to $99,848, which formally keeps BTC below the $100,000 threshold in real (inflation-adjusted) dollars.
Thorne explicitly stated that when prices are converted to 2020 dollars, BTC never surpassed $100,000, since the calculation incorporates every CPI data release from 2020 to the present. This means nominal records and real (inflation-adjusted) records can differ.
Consumer Price Index (CPI) and Inflation
The agency calculating CPI recorded a 2.7% increase over the past 12 months (not seasonally adjusted), which reduces the purchasing power of the dollar. According to CPI data, prices for goods today are roughly 1.25 times higher than in 2020, meaning one dollar now buys about 80% of what it could then.
When recalculating historical prices, this decline in purchasing power is important to consider: it lowers the real value of nominal amounts expressed in the dollars of that period. Therefore, when comparing price peaks, it’s essential to look not only at nominal values but also at their equivalents in real dollars.
Dollar Index (DXY) Trends
The Dollar Index (DXY), which compares the US currency against a basket of other currencies, has fallen 11% since the start of the year to 97.8, according to the data provided. In September, the index dropped to a three-year low of 96.3, and since October 2022, a downward trend has been observed as the dollar weakens against other currencies.
The decline in DXY reflects a relative weakening of the US dollar and is often used by market participants as an indicator of changes in the dollar’s purchasing power abroad. Combined with CPI data, this provides a more complete picture of the real value of assets denominated in dollars.
Why This Matters
For miners in Russia, the recalculation result means that nominal BTC price achievements do not always equate to growth in its real purchasing power when measured in the same dollars. This is important when assessing long-term income and planning equipment upgrades or purchases, since inflation reduces the real value of dollar-denominated payouts.
Additionally, the falling dollar index signals changes in the purchasing power of the currency often used to price equipment and components. Therefore, both CPI and DXY are useful to consider when calculating costs and comparing historical mining revenues in real terms.
What to Do?
Monitor real, inflation-adjusted Bitcoin price values when evaluating long-term profitability, not just nominal records. Keep track of income and expenses in comparable (inflation-adjusted) units to accurately assess the purchasing power of revenue and investment efficiency in equipment.
When planning purchases and upgrades, consider CPI trends and DXY movements: compare equipment and shipping prices in the currency you pay with, and calculate upgrade timing based on the real cost of funds. It’s also wise to maintain reserves to cover unforeseen expenses and the impact of exchange rate and inflation changes.
