Bitcoin's market position inflation corrected

[thecodebear]

On February 9th, 2011 Bitcoin had a market position (price) of 1 USD.

Now, on June, 11th, 2023, the market position of Bitcoin is ~25,000 USD. But is this right? A lot of "money people" or "Bitcoin maximalists" are telling this story. But this is not true at all. Inflation corrected is around 30 to 40 percent of the ~25.000 USD. So it is basically a market position (in relation of the value of 2011) of ~12,000 USD.

This is also really good,

but it shows two things:

1. Bitcoin is FIAT-bounded, and through exchange rates, has a worse inflation rate as FIAT.

2. Nearly every aggregator and exchange which is showing Bitcoin rates not indlation corrected is scamming! (To pump FIAT in the market.)

Prove me wrong, I would love to be wrong! But I am not.

Edit:

And this is just the inflation related to Bitcoin-Fiat/good. What is about the "chain-inflation"? First Bitcoin has 21 million, first fork has 21 million, and so on - and all this Bitcoin eating from the same bowl...

OP, you sorta did the opposite calculation. The compounded inflation rate since 2011 is 30-40%, not that the dollar value is 30-40% what it was. 30-40% means the dollar value in 2023 is 60-70% what it was. Specifically the cumulative inflation rate over the past 12 years from what I can see online is 35%. Which puts $25k at $18.5k, not $12k. But the price currently is $26k, not $25k, which puts it at about $19.25k inflation adjusted.

So while the dollar today has declined to $0.65 in 2011 dollars, Bitcoin has risen from $1 to ~$18,500 in 2011 dollars.


I have no idea what you are talking about "fiat-bounded" or saying bitcoin has worse inflation rate because neither of those things are true. And why would anyone price bitcoin in inflation-adjusted rates to an arbitrary year in the past? That serves no purpose. Of course rates are going to be cited against today's dollar because that's literally what the value is today. Nobody prices anything according to inflation-adjusted rates to some arbitrary previous year.

There ya go, I proved you wrong lol.

And chain-inflation is something imaginary you just made up lol. There's only 21 million bitcoin. There will never be any more.

[landheer]

I really don't understand what you mean
You say that bitcoin inflation is worse than fiat inflation.
I think in this case we have to realize that everything also carries risks because in my opinion fiat currency has its drawbacks and bitcoin also definitely has its drawbacks.

So in my opinion, if our want to invest in BTC, our have to invest wholeheartedly and be prepared to accept risks, and if we are not ready for the risks of investing in BTC, of ​​course we shouldn't invest.

[Magic-Money]

Base on the Bitcoin market position analysis is simply means a correct of the price position to compare with the previous years of the Bear market inflation, before Bull Run takes place and is also application now and the market is ranging for the next bull run, and is a better position to buy and hold while waiting for the next step of Bitcoin movement.

[davis196]

Who gives a sh*t about the US dollar purchasing power back in 2011 or 2013? WE don't live in 2011 or 2013. We live in 2023.
The current purchasing power(or value) of the US dollar is all that matters. I don't give a flying f*ck if Bitcoin is valuated in the current US dollar purchasing power or the 2011 USD purchasing power. All that matters is the fact that Bitcoin preserves wealth and can be used as a store of value(in the long term, and only if the HODLers don't panic sell).
I don't think that BTC inflation is worse than fiat inflation, because there isn't such thing as BTC inflation. The total BTC in circulation isn't growing fast, while the total USD in circulation has reached a ridiculous historical peak.
This "chain inflation" thing you are talking about seems like nonsense to me.

[SyndicateLabs]

But what OP mentioned is also not wrong with that mindset, the indicators from the past and present to compare and draw conclusions, the logic sounds reasonable but honestly very contradictory to me personally. The price story has a lot to discuss, we all have to admit the fact that its value increases over time, but it doesn't happen by accident, look at the problem of search demand. Profit has attracted and is almost an island owner behavior for those with access to crypto or bitcoin. The implementation of forks will result in a split of Bitcoin into new coins and the value of these coins will depend on their marketization after the fork.

[Sayeds56]

Are you curious about why the price of Bitcoin has increased in relation to fiat currency inflation? It may seem contradictory since Bitcoin is also part of the economy and can be affected by inflation. However, the price of Bitcoin has risen primarily because of increased investor interest and demand. Bitcoin has a limited supply, and with more people investing in it, the demand has surpassed the available quantity, leading to a higher price. This is the fundamental reason behind the price surge.

You are correct that  Bitcoin price has surged overtime due to its demand and strong confidence investors have in its echo system. This increase is primarily driven by its two key strengths, limited supply and full decentralization, rather than influenced by inflation of fiat currencies. The historical track record of Bitcoin price reflects that its price is also influenced by other factors, such as state of overall economy, interest rates and regulatory issues.

[yazher]

Base on the Bitcoin market position analysis is simply means a correct of the price position to compare with the previous years of the Bear market inflation, before Bull Run takes place and is also application now and the market is ranging for the next bull run, and is a better position to buy and hold while waiting for the next step of Bitcoin movement.

Yeah! today's crypto market is different due to the fact that it has more investors than before and the best thing to do if you have extra money to spend is to buy some and take advantage of the current situation. The market might offer such opportunities back after it recovers and the price of bitcoins after that might rise up to $40k again surely there will be lots of regrets when that happened and also lots of late buyers again. They only realized that they missed such a good opportunity and consider to catch the moment hoping for the price to rise further.

[Kelward]

Are you curious about why the price of Bitcoin has increased in relation to fiat currency inflation? It may seem contradictory since Bitcoin is also part of the economy and can be affected by inflation. However, the price of Bitcoin has risen primarily because of increased investor interest and demand. Bitcoin has a limited supply, and with more people investing in it, the demand has surpassed the available quantity, leading to a higher price. This is the fundamental reason behind the price surge.

I can relate to your analysis because the forces of demand and supply determines price. When demand is greater than supply, the result is increase in price. Therefore if investors have continued trust and interest in bitcoin, to be investing in it, over the years the demand will increase, which will automatically increase it's value and price, this is basic economics. Eventually it will reach equilibrium, where demand and supply meets, then the forces of demand and supply will determine again if price will go up or down. In the case of bitcoin, it is clear that with price fluctuations over the years, it's value has continued to appreciate. This is a gain for investors in bitcoin.