Bitcoin and gold price inflation adjusting all-time-high

[Charles-Tim]

I think you will find this interesting. Normally the price of bitcoin and gold are displayed in USdollars while this could make use not to know the real worth of an asset because US dollar is fiat and subjected to US government controlling the price. Although, US dollar is a very strong currency, but in the past, it has been subjected to depreciation, fiats are just depreciative currency.
Gold reached a price of $678 U.S. dollars in 1980, according to a breakdown from Visual Capitalist. Accounting for inflation, based on calculations from Officialdata.org, $678 in 1980 held the same buying power as approximately $2,142 in 2020. The precious metal technically broke its U.S. dollar all-time high this year, hitting $2,075, according to TradingView data. Its 1980 record purchasing power level remains unbroken, however. Since its push to $2,075 in August, gold has retraced in price, sitting near $1,778 per ounce at the time of publication.

Bitcoin hit its last all-time price high in 2017, tagging $19,891.99, according to Coinbase’s price index. Accounting for inflation, Bitcoin’s record high stands at $21,131.02 in terms of value, Officialdata.org indicates. U.S. dollar holders lose approximately 2% of their purchasing power per year on average from inflation. Official data reveals 2.13% inflation in 2017, 2.49% in 2018, 1.76% in 2019 and 1.86% in 2020. “If you bought #Bitcoin at the top in December 2017, you won’t truly recover your buying power until we hit 21.24k,” podcaster Vlad Costea said in a tweet on Tuesday. Costea used $20,000 as Bitcoin’s high, putting the numbers and dates into an inflation calculator to determine the most accurate figures.

Taking U.S. dollar devaluation into account, gold has still not reached the all-time price high it set in 1980.
https://cointelegraph.com/news/gold-and-bitcoin-eye-inflation-adjusted-all-time-highs-but-it-s-taken-gold-40-years
https://cointelegraph.com/news/will-money-printer-go-brrr-rob-bitcoin-of-its-all-time-high
We should be able to differentiate between all-time-high in price of assets which is usually in US dollar and the real all-time-high in value. Gold was able to reach all-time-high in price if compared to UD dollar this year, but in real value, gold has not reached all-time-high since 1980. While bitcoin in just three years reached all-time-high today in price in US dollar but not yet reached all-time-high in real value as it needs to get to a price of $21,131.02 as a result of US dollar inflation too, but very possible this will only be achievable in just less than three years.

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[rdbase]

Gold is decoupling from bitcoin price rise and is actually doing worse than BTC for the first time since it's inception.
So bitcoin is essentially the new digital gold as cheesy this term from many years ago sounds.
The all time high for coinbase is close to the one which is $19,999 from gemini but basically the same just off by around $100 is all.

[The Sceptical Chymist]

OP, I agree that all-time highs should technically be reported in "today's dollars", kind of like how box office performance for movies is used to compare blockbusters from different eras.  But as far as bitcoin is concerned, so far it's not relevant (as far as I know) because a dollar in 2020 is probably worth close to what a dollar was worth in 2009, i.e., inflation over the last decade hasn't devalued the USD dramatically.  Again, that's with the qualification of AFAIK, because I don't know what the data actually is.

But it is relevant to gold, which has been subject to market forces ever since the gold standard was done away with.  However, this is not a gold forum but a bitcoin one, and there have been too many comparisons between the two ever since bitcoin was created.  Bitcoin isn't gold.  It's not digital gold either IMO, though a lot of others may disagree.

Gold is decoupling from bitcoin price rise and is actually doing worse than BTC for the first time since it's inception.
So bitcoin is essentially the new digital gold as cheesy this term from many years ago sounds.

Sure, gold is a safe-haven asset.  Right now people are speculating on very risky investments, including bitcoin, and they're staying away from precious metals for the most part.  And you're damn right, "digital gold" is indeed cheesy as hell.

[hatshepsut93]

Inflation is measured annually, so 2017, the year when Bitcoin hit its ATH/previous ATH, shouldn't be included in this calculation , because the ATH was reached in the last month of the year. By removing these 2.13%, the argued price can be adjusted to $20,790.

Anyway, comparing Bitcoin with gold is not a good idea, gold has been an asset for thousands of years, Bitcoin is just 11 years old and it goes through the phase of rapid price growth as more investors discover it - but this will end at some point, and only then comparison with gold will become more fair.

[Husires]

Why do you compare the different scales? It's like saying that one person outperformed someone at eating 100 Hamburgers, while the other failed because he could not run 100 kilometers.
When gold is close to peaking at $ 2,100, it does not mean that Bitcoin will do, there is no connection between the two things.
The intensive printing of money for this year will have its effects evident in the coming year, as the price of many things will increase and paper money will begin to decrease in its actual value.

[cryptworld]

If anyone is interested in investing in Gold probably the easiest way would be to buy PAXG https://coinmarketcap.com/currencies/pax-gold/. Price is 1:1 to Gold.

[Ucy]

I don't think it's even a good idea for Gold to increase in price like Bitcoin in this world population and its high usage/demand for gold for lots of purposes like manufacturing. That kind of extreme price increase is more suitable for things used just for money.

[atjiat]

I don't think it's even a good idea for Gold to increase in price like Bitcoin in this world population and its high usage/demand for gold for lots of purposes like manufacturing. That kind of extreme price increase is more suitable for things used just for money.

In any case, the demand for gold in the world is growing rapidly, especially given the development of high technologies. But one must take into account the fact that due to the economic crisis, as well as the depreciation of national currencies, people are investing in assets that are more understandable for them. Thus, someone chose to invest in bitcoin, and someone trusts gold more, because its volatility is not as high as that of bitcoin and there is an opportunity to keep their savings without risk.

[ReiMomo]

Gold and Bitcoins are two different things for gold is a physical thing that you can touch yet bitcoin is a digital one but comparing the two doesn't seem to be too bad for me since both are assets which people are investing and I guess if we compare the value of the two, as well as their ATH people, would be aware which one is more capable to cope up in terms of inflation and value.

OP is right we need to identify and meet the real ATH in value for ATH at price is only a figure but the value of it that correlates to the importance and purchasing power is much important and since we haven't reached the ATH in the value we still need to wait a little longer before we can claim that we have reached the new ATH for bitcoin.

[Hydrogen]

We should be able to differentiate between all-time-high in price of assets which is usually in US dollar and the real all-time-high in value. Gold was able to reach all-time-high in price if compared to UD dollar this year, but in real value, gold has not reached all-time-high since 1980. While bitcoin in just three years reached all-time-high today in price in US dollar but not yet reached all-time-high in real value as it needs to get to a price of $21,131.02 as a result of US dollar inflation too, but very possible this will only be achievable in just less than three years.

I think I saw bitcoin trading as high as $24k on africa's golix exchange in 2017. Markets are considered accurate at setting prices. But there is no finite timeline for how long it takes for undervalued or overvalued assets to normalize to a correct value. Inflation is a particularly touchy subject due to its distribution side(into whose hands does newly printed fiat go). And the insistence of experts to redefine what terms like unemployment and inflation mean on a fundamental level.

If you're interested in inflation, you might find this interesting.

Inflation Actually Near 10% Using Older Measure

 April 2011

https://www.cnbc.com/id/42551209

Inflation could be a very relative statistic for many reasons that aren't easy to define.

[tbterryboy]

Your first paragraph I am not getting it, how does the price of Bitcoin and gold being displayed in fiat make us not to know the value of it? You’re not serious, if the value is not calculated in fiat, then what should it be calculated in,  Will you calculate BTC in BTC, or Gold in Gold? Every asset is being weighed with another asset, so it’s going to be BTC/USD and Gold/USD, and not BTC/BTC or the other.

Without it being calculated that way, in fiat, you wouldn’t know the value of it. Lastly , both are on their way up, although I wasn’t aware that Bitcoin reached the $21k price you listed here, the last ATH in 2017 was around $19.7k and the new ATH I know that happened recently on November is $19.8k.

[usekevin]

Your first paragraph I am not getting it, how does the price of Bitcoin and gold being displayed in fiat make us not to know the value of it? You’re not serious, if the value is not calculated in fiat, then what should it be calculated in,  Will you calculate BTC in BTC, or Gold in Gold? Every asset is being weighed with another asset, so it’s going to be BTC/USD and Gold/USD, and not BTC/BTC or the other.

Without it being calculated that way, in fiat, you wouldn’t know the value of it. Lastly , both are on their way up, although I wasn’t aware that Bitcoin reached the $21k price you listed here, the last ATH in 2017 was around $19.7k and the new ATH I know that happened recently on November is $19.8k.

Bitcoin may be differ from Gold.But bitcoin is a new and attractive asset then gold.From gold we can't get more profit and from bitcoin we can easily earn from it.Sometimes their may be huge fall in bitcoin price, it's doesn't mean bitcoin is a unstable crypto currency. Now the price of bitcoin had reached 19k$ again and made the people to realise the value of bitcoin.

[dothebeats]

Bitcoin has been compared and contrasted to gold for the longest time due to a number of reasons. Personally I don’t see some of these as relevant considering that they are entirely different entities that could care less of what the other one’s doing. But anyways, I don’t think people could care that much to know how much their investment was worth a decade or so ago if inflation was taken into account. Most of them just care about present monetary values of their investments and that’s it, though I agree that people should know how it affects their ‘worth’ actually to better undestand the dynamics of currencies as a whole and make moves accordingly.

[Ryker1]

Well, the only thing that differs between the two is that gold is a precious metal that can be touched physically and has no limitation in supply unlike with bitcoin it is pure digital with limited numbers to be mined and IMO these two became comparable only in terms of mining, assets, -- and investment and for some reason I don't go against those people who keeps on comparing them since both are worthy to be invested in or to be owned. As a matter of fact, OP's topic is really interesting, that by knowing the difference of ATH in price and in the value we can therefore distinguish who among the two is more capable of surviving in devalue and inflation of an asset towards any other currency.

[Buttermellow]

We cannot compare the value of gold and the fiat currency. Fiat currency value will depend on the economy of a certain country not like in the asset for example gold that can be valuable over a period of time due to limited supply of resources and many people wanting to have gold which availability of it could be difficult to get due to its process which is mining and there are only few are allowed to do so. So, asset will tend to be more valuable than fiay currency but if people do not like and will be dumping their gold then that gold will have low or no valu at all same goes to bitcoin. Bitcoin is a new gold.

[davinchi]

Makes sense to calculate things in inflation obviously. I doubt that $20k worths that much care because it was only few years ago and another thousand isn't really that big of a deal in bitcoin since it moves a lot higher and lower in numbers when gaining and losing compared to gold.

However gold deal is definitely something to behold, and could be some sort of explanation to why investing into something that would yield you profit very little over course of many decades is not really the greatest idea because at the end of the day you are not really making a profit, you are just avoiding losing your worth and even if that is something cool, I feel like that is usually not enough for people who want to get richer.

[so98nn]

Gold is decoupling from bitcoin price rise and is actually doing worse than BTC for the first time since it's inception.
So bitcoin is essentially the new digital gold as cheesy this term from many years ago sounds.
The all time high for coinbase is close to the one which is $19,999 from gemini but basically the same just off by around $100 is all.

I wouldn't even see bitcoin and gold coupled in any sense though. OP suggests relation based on USD which forms base unit to know the values for gold and bitcoins. That's like asking how much liters of water in a bucket or how much litres of coca cola in the bucket.

Both the entities are completely different I would say and holds the unit value based on their taste. Gold is like water, simple, universal traditionally known yet capitalised with government control.

On the other hand, bitcoin is like secrete recipe of coca cola, tastier, widely loved and capitalised based on the public accounts.

So you see that's the thing about their relationship.

[error08]

it makes sense if calculate the price + inflation rate every year, although people will agree that $20k is the ath, except in term of the value, it does not recover yet.
Gold almost hit the recovery point as well although it takes a long time compared to bitcoin, can't say it's the same thing as the adoption is different, the value is also different.
And all this happens because the Pandemic is one of the factors that affect how the market preserves their funds, the government print so much money and economic downturns lead to devaluations.

[nemey]

I don't really think about it. For me, investing in crypto especially in Bitcoin is still more attractive than gold. Even if there will be inflation in the US dollar, I think crypto will be fine. Because all control in crypto investing rests with each coin holder.

[RealMalatesta]

I honestly believe that if we could find a way to just take the peaks of these prices we could manage to make it look bigger in the future as well. If we take 10k today instead of 19k like it is, and calculate it 50 years down the road when it is 100k or more, we are going to look like today's 10k worths more. However nobody talks about the fact that we are not getting free money for our money anywhere, if I have 10 dollars today, in 50 years time it will still be 10k and it wouldn't worth anything whereas if I have 1 bitcoin, it will be valued a lot more.

Hence I think when you calculate your profits with inflation you are doing something wrong, because normally your money doesn't gain anything when it stands there idle, which means no matter how much you can gain, it is better.