Bitcoinโs All-Time High: Adjusted for Inflation, It Could Be Closer to $75,000
As Bitcoin continues its upward trajectory, many are wondering when it will reach and surpass its previous all-time high. However, since November 2021, several factors have changed, including the rate of inflation in the United States. To accurately assess the target price for Bitcoinโs all-time high, itโs important to consider inflation adjustments.
The Impact of Inflation
If Bitcoin were to return to its high-water mark of $69,044 per coin, it would be under different market conditions and a higher rate of inflation. According to the U.S. Bureau of Labor Statisticsโ Consumer Price Index (CPI) inflation calculator, the price of Bitcoin in November 2021 would be worth closer to $75,000 today.
Bitcoinโs Price Journey
After reaching its all-time high, Bitcoin experienced a significant decline as the crypto bear market took hold. However, inflation continued to rise during this period. Despite this, Bitcoin gradually climbed back up above $30,000 last April and surpassed $40,000 in December.
The Supply-Demand Dynamics
In addition to inflation, another factor that affects Bitcoinโs price is the growth of its supply. Since December 2021, the total supply of Bitcoin has increased by about 3.8 percent. This growth rate is slower than the rate of inflation.
Bitcoin as an Inflation Hedge
Given Bitcoinโs reputation as an inflation hedge, many wonder how it has performed during the current inflationary period in the U.S. This question sparked a debate on Reddit among cryptocurrency enthusiasts.
The Role of Halving
Calculating Bitcoinโs future price also requires considering the upcoming Bitcoin halving, which will reduce the amount of Bitcoin miners receive as a reward. The impact of this milestone on Bitcoinโs price is a subject of intense debate.
Hot Take: Bitcoinโs Price Outlook for 2024
According to David Waugh, an economist and lead analyst at Coinbits, measuring Bitcoinโs exchange rate in dollars should account for inflation adjustments. While comparing nominal all-time highs is common, itโs essential to consider the real value of Bitcoin over time.
Waugh believes that Bitcoinโs price will continue to rise significantly in 2024 due to various factors:
- Massive inflows into spot Bitcoin ETFs
- Bitcoin companies developing layer-2 solutions and consumer-facing products
- Incorporation of Bitcoin into various financial offerings and applications
These developments are expected to drive adoption and create positive price pressure on Bitcoin.
Demian Crypter emerges as a true luminary in the cosmos of crypto analysis, research, and editorial prowess. With the precision of a watchmaker, Demian navigates the intricate mechanics of digital currencies, resonating harmoniously with curious minds across the spectrum. His innate ability to decode the most complex enigmas within the crypto tapestry seamlessly intertwines with his editorial artistry, transforming complexity into an eloquent symphony of understanding.