Bitcoin price and Inflation

[BlackHatCoiner]

It’s not just about the value. Real inflation—if we don’t just accept the government’s manipulated CPI—is also difficult to calculate.

You are correct that there's no reliable metric to measure inflation. Since "inflation" comes from "inflate" which means "to expand the supply of something", then the most accurate metric would be the M2 supply of money. This is what is "inflated", and results in the rising of prices.

Since most freshly printed money is used to buy houses as a way to protect the property owners against inflation, the price of your dream house could also be a metric that measures inflation.

[AVE5]

A Bitcoin worth $68K 2021 could be higher than a Bitcoin worth $77K today
and many tend not to think about it Same applies to other assets.
We tend to focus on nominal value and neglect real value
If we are to measure and account for inflation Bitcoin price would be lower than we see.

Bitcoin or whatsoever potential assets projected to hedge against inflations and to estimate the value of the asset as bitcoin, it must be evaluated according to its real world value and then you'll see that what the asset or bitcoin was worth in the previous based on the economy ratio isn't the same because of inflations.
As the matter of fact that the fiats can be devalued by inflations, you'll also see that the lower price of the asset as evaluated in the Usd at the past has stronger economy value in the global market than the high price of today's.
So the values are only affecting the fiats while the asset price increases to sustain the inflations.
This reason is why it's important to invest on potential long term assets like bitcoin.
Of course 1 Btc remains 1 Btc while the value is evaluated according to the real world price measured in Usd.

[cyberninja2]

...

That’s because, the rise in the price of commodities would in many ways affect just how much you are allowed r spare for investments since there would always be needs and wants that would need satisfying, leaving you with very little choice on how to go about investing.

This is one of the issues that may become a problem we all face. Rising commodity prices make it difficult for us to set aside money for investments. Every increase in commodity prices leads to higher prices for necessities forcing us to focus less on investments and more on the supply of necessities for survival.

Usually with a source of income we can still manage both aiming to set aside some of our income. However rising commodity prices mean that some of us can only manage to meet our survival needs, leaving us unable to invest in Bitcoin. Another reason is that the convenience of investing will no longer be as comfortable as it was before the commodity price increase. Ultimately we can only invest in smaller amounts than usual.

[Awaklara]

Ultimately we can only invest in smaller amounts than usual.

I think it will be better than nothing at all. The increase in commodity prices that many people are experiencing right now cannot be avoided. We must be wiser in adjusting our needs and expenses. If there are expenses that can be reduced, we can do it.
The situation will indeed be quite difficult when our income stays the same, but our expenses increase. Reducing the amount we invest is one thing that can be done. Hopefully, the difficult situation that many are experiencing now will improve soon.

[Mate2237]

Ultimately we can only invest in smaller amounts than usual.

I think it will be better than nothing at all. The increase in commodity prices that many people are experiencing right now cannot be avoided. We must be wiser in adjusting our needs and expenses. If there are expenses that can be reduced, we can do it.
The situation will indeed be quite difficult when our income stays the same, but our expenses increase. Reducing the amount we invest is one thing that can be done. Hopefully, the difficult situation that many are experiencing now will improve soon.

The truth is that inflation cost will always be on the rise and the cost of living will always be on the increase. Inflation is one thing that we have no control over. But the only thing that we can do is to make sure that we position ourselves in such a way that we will not be conditioned by the cost of living.


This implies that we should not rely surely on our salary for a living, the only way out of this is through setting up a system that will be bringing you income even when you are asleep because salary is not what we should put our hopes on if we are to live above average.

[cyberninja2]

...

I think it will be better than nothing at all. The increase in commodity prices that many people are experiencing right now cannot be avoided. We must be wiser in adjusting our needs and expenses. If there are expenses that can be reduced, we can do it.
The situation will indeed be quite difficult when our income stays the same, but our expenses increase. Reducing the amount we invest is one thing that can be done. Hopefully, the difficult situation that many are experiencing now will improve soon.

As you stated if this didn't happen at all we would likely become more relaxed and never strive to increase our performance in generating more income. The rising commodity prices which force us to be more active in earning income mean our responsibility for our income will increase leading us to focus more on managing our spending and avoiding being as greedy as we were when commodity prices were stable some time ago.

The current situation certainly seems to be one that not many people want but we can't enforce restrictions, with the aim of reducing prices. We can still control the current fluctuations even though the current fluctuations could continue. Therefore no one wants commodity prices to fluctuate. Every time we want to do something that could cost money we're already more concerned about minimizing our spending. This is so we can still hold back to protect what we need, even though it's very difficult to do so, especially against things that are inappropriate. Increased commodity prices are certainly difficult to control, as we are essentially people who spend money without much consideration.

[Y3shot]

Fiat will always be what it is; it is better to have Bitcoin. No matter how inflation tries to kill the value of fiat, Bitcoin will definitely make it valuable. If inflation makes fiat unavailable, converting that same amount to Bitcoin and holding it will provide a better value. This is why people need to invest in Bitcoin, as it is a good store of value. The more inflation affects the value of money, the more Bitcoin will increase the value of money to have some worth. The worst thing is for one to rely solely on fiat, as it will only make one poorer.

[boyptc]

Ultimately we can only invest in smaller amounts than usual.

Regardless of how high is the inflation that we're dealing, this is what's on our minds. As long as there's a way for us to invest then that's all that matters.

While it's truly different how valuable it was during the early years at a low price but the situation can also be counted if we're able to do it right now or not.

As long as we continue to DCA and hold, that's the priority for each of us. Despite with the high prices of everything right now, it's where the price of Bitcoin going and that's to increase too.

[cyberninja2]

Regardless of how high is the inflation that we're dealing, this is what's on our minds. As long as there's a way for us to invest then that's all that matters.

While it's truly different how valuable it was during the early years at a low price but the situation can also be counted if we're able to do it right now or not.

As long as we continue to DCA and hold, that's the priority for each of us. Despite with the high prices of everything right now, it's where the price of Bitcoin going and that's to increase too.

It's true that as long as we have good intentions, there will be a way for us to do everything or get through it. We can still invest even though circumstances may seem problematic to some. However we can still continue investing because it has become our primary vehicle for doing so. Therefore investing is an important part of today's economy for those who prioritize it.

What happens won't be a big deal because the method is entirely up to us. The difference is clear but the situation sometimes makes us reckon with the initial price. Ultimately we will determine whether or not we can do it when prices drop in situations we couldn't have anticipated.

That's beyond anyone's control as it's purely our responsibility and our responsibility. We always prioritize staying afloat using the DCA strategy whether the price is declining or perhaps clearly rising when the price of Bitcoin no longer matters to those who have prioritized Bitcoin.

[dezoel]

It’s not just about the value. Real inflation—if we don’t just accept the government’s manipulated CPI—is also difficult to calculate.

You are correct that there's no reliable metric to measure inflation. Since "inflation" comes from "inflate" which means "to expand the supply of something", then the most accurate metric would be the M2 supply of money. This is what is "inflated", and results in the rising of prices.

Since most freshly printed money is used to buy houses as a way to protect the property owners against inflation, the price of your dream house could also be a metric that measures inflation.

Interestingly, you do not even need to print money to have inflation, you will have to eventually but you do not have to when it first happens. When something gets expensive for a reason that creates a chain, you could be late to it.

Like in this case, oil got expensive because of Hormuz, and that caused logistics to be expensive, moving food from farms to table, and that caused the food to be more expensive, which resulted with everything else to be more expensive, without a need to print more money.

[boyptc]

Regardless of how high is the inflation that we're dealing, this is what's on our minds. As long as there's a way for us to invest then that's all that matters.

While it's truly different how valuable it was during the early years at a low price but the situation can also be counted if we're able to do it right now or not.

As long as we continue to DCA and hold, that's the priority for each of us. Despite with the high prices of everything right now, it's where the price of Bitcoin going and that's to increase too.

It's true that as long as we have good intentions, there will be a way for us to do everything or get through it. We can still invest even though circumstances may seem problematic to some. However we can still continue investing because it has become our primary vehicle for doing so. Therefore investing is an important part of today's economy for those who prioritize it.

What happens won't be a big deal because the method is entirely up to us. The difference is clear but the situation sometimes makes us reckon with the initial price. Ultimately we will determine whether or not we can do it when prices drop in situations we couldn't have anticipated.

That's beyond anyone's control as it's purely our responsibility and our responsibility. We always prioritize staying afloat using the DCA strategy whether the price is declining or perhaps clearly rising when the price of Bitcoin no longer matters to those who have prioritized Bitcoin.

Like what the people are telling about it, "if there's a will, there's a way".

And that's what we should do, we have to make a way for it even though how tough life is and how high the inflation is coming.

The ultimate sacrifice comes from the little ones that we're able to do during the tough times. Once we pass that, things will be easier and lighter because of that and we've seen that with bitcoin, from the early investors and how they've made it for a very long time.

[dansus021]

Well thanks for the website I finally know how much inflation that happen on my country and based on the data Indonesian Rupiah is lossing -87% of purchasing power MY GOD with the total inflation staggering of 676% oh my god this is beyond insane.

Bitcoin isn't failing; it’s simply doing its job as a mirror, reflecting just how much value the dollar has shed over the last five years. If you don't adjust your financial ledger for inflation, you are playing the game with a broken ruler.

[Emitdama]

Fiat will always be what it is; it is better to have Bitcoin. No matter how inflation tries to kill the value of fiat, Bitcoin will definitely make it valuable. If inflation makes fiat unavailable, converting that same amount to Bitcoin and holding it will provide a better value. This is why people need to invest in Bitcoin, as it is a good store of value. The more inflation affects the value of money, the more Bitcoin will increase the value of money to have some worth. The worst thing is for one to rely solely on fiat, as it will only make one poorer.

Inflation does not make fiat totally unavailable but it only decreases its value over time but if that was true that fiat will be no more, then it does not make sense to put it to BTC or say that BTC gives it a better value. But, I find it hard if that happens like how can a normal person obtain a BTC now?

What if they are not a miner or a BTC sig participant in the forum?, Don't do BTC faucet, and other task online in exchange for BTC, etc... But like how money evolve before, for sure another will also be invented. For now, this is not only about BTC affecting fiat but it is also about how fiat will affect BTC or how much BTC we can now own due to inflation.

[Findingnemo]

True, inflation helps the price of bitcoin to go up, assuming even if there is no progress happened in the demand and supply of the bitcoin itself. But the system of fiat too complicated and too many variable and less of transparency when it comes to the actual inflation rate than the real reported inflation rate.

As someone said even if the value is on the decline but you can buy more with the same amount of sats then the purchasing power of bitcoin is spiked.

[GeorgeJohn]

Ultimately we can only invest in smaller amounts than usual.

I think it will be better than nothing at all. The increase in commodity prices that many people are experiencing right now cannot be avoided. We must be wiser in adjusting our needs and expenses. If there are expenses that can be reduced, we can do it.
The situation will indeed be quite difficult when our income stays the same, but our expenses increase. Reducing the amount we invest is one thing that can be done. Hopefully, the difficult situation that many are experiencing now will improve soon.

The reason cybeminja2 portrayed is very cogent...if you can invest a smaller amount, that will caused an investor no harm, because it's advisable to invest with what you can afford to lose...

If the market of bitcoin is not conducive by investor to invest a larger amount, it will be better for the investor to invest what is assured of losing without affecting his source of income or house hold....it's better to invest what you can afford to lose, and this is the main reason we need to invest with our discretionary funds...

[laijsica]

Why is it that people don't realize that since bitcoin is usually measured in dollar
so inflation affect how we perceive it's price

A Bitcoin worth $68K 2021 could be higher than a Bitcoin worth $77K today
and many tend not to think about it Same applies to other assets.
We tend to focus on nominal value and neglect real value
If we are to measure and account for inflation Bitcoin price would be lower than we see.

This doesn't mean Bitcoin is failing It's that nominal ATH is different from Real ATH.

Look forward to your opinions and clarity.

For those interested
You can use this site to measure for different currencies
https://inflationglobal.com/en/

I understand the impact you are trying to explain about the dollar and inflation on the price of Bitcoin. To put it more simply, most of the products we purchased in 2021 have increased in price, that is, the value of the dollar has decreased. The negative impact of inflation is more visible through the strengthening of the dollar against the local currency. We have to burn more local currency to buy Bitcoin.

No one may pay much attention to this complex financial equation, but everyone knows that the price of most products has increased a lot compared to what it was 5 years ago.

This does not mean that Bitcoin has failed, but if you do not hold Bitcoin and deposit cash funds the negative impact of inflation will be greater on your financial sector because the value of the local currency is gradually decreasing. There is a possibility that the price of Bitcoin will increase a lot in the future.