In October, Bitcoin reportedly traded above $126,000, but when adjusted for inflation, its peak value did not surpass $99,848, according to Alex Thorn, the global head of research at Galaxy Digital. Thorn emphasized this distinction between nominal and real prices, which reflect the asset's purchasing power as adjusted for inflation, using 2020 dollars as a benchmark.
Thorn highlighted that the beginning of 2020 was chosen as a reference point due to significant monetary policy actions taken by the Federal Reserve in response to the COVID-19 pandemic. This context provides insight into Bitcoin's performance and its perceived value in the current financial landscape.
The implications of this analysis could influence both bullish and bearish perspectives in the market. Supporters of Bitcoin may argue that the recent price increase from 2022 lows is less dramatic than it appeared, while critics may question Bitcoin's reputation as a hedge against inflation, suggesting that traditional assets like gold might be more reliable.