On the day Bitcoin finally crossed the $100,000 mark, many people celebrated by taking screenshots and sharing them in group chats with rocket emojis. They revisited old tweets from 2021 to bask in the victory they had long awaited. It felt like a sense of closure, as if the market had fulfilled a promise made long ago.
However, a chart began circulating that changed the narrative. Alex Thorn, head of research at Galaxy, highlighted that when adjusted for inflation using 2020 dollars, Bitcoin actually fell just short of $100,000, reaching around $99,848 in real terms. This revelation was not meant to discredit Bitcoin’s achievement but rather to remind us that the value of money evolves over time.
Inflation not only makes things more expensive but also alters the significance of a dollar. A $100 bill in 2020 does not hold the same purchasing power as in late 2025. Therefore, when Bitcoin reaches a milestone in nominal terms, it is essential to consider its real value adjusted for inflation.
The recent market volatility post the $100,000 peak underscores the importance of understanding real returns. Institutions and investors focus on actual gains after inflation and relative to other investment options. For Bitcoin to mature as a macro asset, it must be evaluated based on these factors.
The fluctuating inflation data during the recent cycle further complicates the assessment of Bitcoin’s real achievements. Despite the market’s emotional reactions to nominal highs, the underlying strength of Bitcoin’s cost basis suggests a more stable foundation.
Looking ahead, three potential scenarios could shape Bitcoin’s future performance: disinflation and easing making nominal highs more significant, sticky inflation diminishing the real value of nominal peaks, and a resurgence in ETF demand propelling Bitcoin to new heights.
In conclusion, while Bitcoin’s $100,000 milestone was a significant moment, the evolving nature of inflation reminds us that the true value of assets is constantly changing. As Bitcoin continues to navigate market dynamics, its ability to deliver meaningful real returns will determine its long-term success.
