Written by: Blockchain Knight
Recent Galaxy research shows that, measured in terms of 2020 U.S. dollar purchasing power, Bitcoin's actual value is approximately $99,848, falling short of the true $100,000 milestone.
This discrepancy does not negate Bitcoin's gains but reveals how inflation quietly rewrites milestones denominated in fiat currency. This difference holds significant practical meaning for the current institutionally-driven cycle.
The core impact of inflation is altering the real value of the U.S. dollar. The purchasing power of the dollar has significantly declined in recent years. Converting current nominal prices to 2020 dollars requires multiplying by 0.8.
This means $100,000 in 2025 is equivalent to only $80,000 in 2020. To match the purchasing power of $100,000 in 2020, Bitcoin's nominal price would need to approach $125,000. The peak of this cycle happens to be near this zone, intensifying the debate.
For institutions, real returns are the core evaluation metric. Institutions like pension funds are not concerned with nominal gains but focus on returns after adjusting for inflation. This is also an inevitable test for Bitcoin as it evolves into a macro asset.
Current chaotic CPI data adds further uncertainty. The Bureau of Labor Statistics suspended CPI releases in 2025 due to funding interruptions, and different statistical methods yield slightly varying results, making real value assessment more complex.
Market reactions confirm this value divergence. Bitcoin fell sharply by 30% after its October peak. The assets under management of U.S. 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 the foundation remains solid. Bitcoin's realized capitalization reached a new all-time high of $1.125 trillion this year, reflecting a strengthening base of long-term holders.
Future trends require attention to three directions. First, changes in monetary policy could lead to a return of nominal value. Second, high inflation could render nominal new highs as hollow numbers, with rising real yields increasing pressure. Third, ETF demand acceleration could drive a breakthrough past inflation-adjusted resistance levels.
Citi predicts a base case of $143,000 and an optimistic case exceeding $189,000 for Bitcoin in 2026, with ETF fund flows remaining the core variable.
In essence, inflation makes Bitcoin's fiat currency milestones moving targets. Bitcoin is often seen as a hedge against inflation, yet its symbolic fiat currency milestones are ironically rewritten by inflation.
The next time a round-number threshold is approached, the market should focus not on the number itself but on the real purchasing power behind it. This is the key to whether Bitcoin can truly step into a new era.
