Is the $100,000 Bitcoin fake because of inflation?

Recent Galaxy research shows that, in terms of 2020 purchasing power, Bitcoin's actual value is approximately $99,848, falling short of the true $100,000 milestone.

This contrast does not negate the rise in Bitcoin's value, but rather reveals how inflation is quietly rewriting the milestones of fiat currency pricing. For this institutionally driven cycle, this difference is of great practical significance.

The core impact of inflation is that it changes the real value of the dollar. The purchasing power of the dollar has declined significantly in the past few years, and the current nominal price needs to be multiplied by 0.8 to be converted into the dollar in 2020.

This means that $100,000 in 2025 is only equivalent to $80,000 in 2020. To match the purchasing power of $100,000 in 2020, the nominal price of Bitcoin would need to be close to $125,000. The peak of this cycle happens to be near that area, exacerbating the controversy.

For institutions, actual returns are the core evaluation criterion. Pension funds and other institutions are not concerned with nominal price increases, but rather with returns after deducting inflation. This is also an inevitable test for Bitcoin to advance into a macro asset.

The current chaotic CPI data adds further uncertainty. In 2025, the Bureau of Labor Statistics will suspend the release of CPI data due to funding disruptions, and different statistical methods will yield slightly different results, making the judgment of actual value more complicated.

Market reactions confirmed this value divergence. Bitcoin fell sharply by 30% after its October peak, and the assets under management of US spot Bitcoin ETFs dropped from a peak of $169.5 billion on October 6 to $120.7 billion on December 4.

However, on-chain data shows that the foundation remains solid, with Bitcoin's actual market value reaching a record high of $1.125 trillion this year, reflecting a strengthening base of long-term holders.

Looking ahead, three key areas need to be considered: first, changes in monetary policy will lead to a return to nominal value; second, high inflation will render new nominal highs meaningless, while rising real yields will exacerbate the pressure; and third, accelerated demand for ETFs will drive a breakthrough of the resistance level after inflation adjustments.

Citigroup forecasts Bitcoin's base case value at $143,000 and its optimistic case value at over $189,000 in 2026, with ETF fund flows remaining the core variable.

Essentially, inflation has turned Bitcoin's fiat currency milestones into moving targets. It's ironic that Bitcoin, often seen as a hedge against inflation, has had its iconic fiat currency milestones rewritten by inflation.

The next time Bitcoin reaches a key psychological level, the market should focus not on the number itself, but on the actual purchasing power behind it. This is the key to whether Bitcoin can truly enter a new era.