– What are the historical milestones in Bitcoin’s price and how do they correlate with inflation rates?

Alex Thorn: Why Bitcoin Never Truly Hit $100K When Adjusted for Inflation

Bitcoin’s march toward six figures has long been the ultimate headline. But Alex Thorn, Head of Research at Galaxy, argues that the market’s fixation on round numbers ignores a crucial variable: inflation. In real terms, he says, Bitcoin has not “truly” hit $100,000 because $100,000 today doesn’t buy what $100,000 did just a few years ago. For builders, traders, and institutions across crypto and web3, this framing matters for how we measure cycles, risk, and return.

Nominal vs. Real Bitcoin: The Inflation Adjustment That Changes Milestones

Markets quote Bitcoin in nominal dollars. Real returns, however, adjust for purchasing power-typically using CPI. When inflation runs hot, nominal prices can set records that aren’t records in real terms.

• Nominal price: The number you see on the screen (e.g., $100,000).
• Real price: Nominal price adjusted for inflation to a base year (what that amount is “worth” in base-year dollars).
• Takeaway: A nominal $100,000 print in 2025 may equate to far less than $100,000 in 2020-2021 dollars.

Why this matters to crypto participants

• Cycle analysis: “New all-time highs” should consider real purchasing power to compare cycles apples-to-apples.
• Risk and treasury: Funds, DAOs, and miners should mark success to real returns, not just nominal numbers.
• Macro signaling: Real highs correlate better with improvements in liquidity and adoption regimes.

What Alex Thorn Is Really Saying About Bitcoin’s “$100K”

Thorn’s core point is not anti-bitcoin; it’s pro-precision. He emphasizes that the industry should measure progress in real terms:

• Inflation since 2020-2021 lifted the nominal bar for what “$100k” signifies in purchasing power.
• Even when Bitcoin sets a new sticker-price record, it may not be a real record after inflation.
• For the 2021 peak near $69k, the real-terms hurdle in later years is higher-many analysts estimate the “real ATH” hurdle moved into the high-$70ks or low-$80ks depending on CPI assumptions and the exact month used.

Translated: A future $100k print isn’t the same feat as the market imagined in 2020-2021. The real “$100k” is higher now.

Crunching the Numbers: How Far Is Bitcoin From a Real $100K?

Exact levels depend on the inflation series and reference month, but the logic is straightforward:

1. Pick a base year (e.g., 2021) and an inflation index (commonly U.S. CPI-U).
2. Compute cumulative inflation from the base year to today.
3. Scale the nominal target by that inflation to find the real-equivalent threshold.

Illustrative scenarios (rounded):

For many observers evaluating from a 2020-2021 base, cumulative inflation has been on the order of the low-to-mid teens into 2025. That implies a “real $100k” is closer to $115k (give or take) in current dollars. In other words:

• If Bitcoin prints $100,000 in 2025, that’s impressive-but it’s not $100,000 in 2021 purchasing power.
• To match the psychological milestone people envisioned a few years ago, Bitcoin likely needs to exceed ~$110k-$120k, depending on your CPI window.

Why This Lens Improves Bitcoin Market Analysis

1) Trend confirmation in real terms

• Real ATHs are a stronger signal of structural demand than nominal prints distorted by inflation.
• They better align with improvements in liquidity, on-chain activity, and macro liquidity cycles.

2) Portfolio construction and risk

• Benchmark to real returns when setting mandates, rebalancing across BTC, ETH, and risk-free yields.
• Real drawdowns are the relevant measure for VaR and stress testing in a high-inflation regime.

3) Miners and infrastructure

• Block rewards and fee revenue should be assessed versus real energy and capex costs, especially post-halving (April 2024).
• Hashprice in real terms matters for expansion decisions and treasury policy.

4) Institutions and ETFs

• Spot Bitcoin ETFs (launched in the U.S. in 2024) changed the flow of funds and liquidity.
• But mandate performance should reference real returns to compare BTC’s risk-adjusted edge versus T-bills and credit.

Practical Tips: Track Bitcoin’s Real Price Correctly

• Pick a consistent CPI series (e.g., BLS CPI-U) and a base month (e.g., Nov 2021).
• Use a simple formula: Real Price = Nominal Price × (Base CPI / Current CPI).
• Monitor both: nominal ATHs for sentiment, real ATHs for fundamentals.
• Contextualize milestones: “$100k nominal” vs. “$100k in 2021 dollars.”

Conclusion: The “Real $100K” Is Higher Than the Headline

Alex Thorn’s message sharpens the industry’s focus: inflation lifts the bar for Bitcoin’s milestones. Whether or not the ticker prints $100,000, the real achievement-the purchasing-power-equivalent “$100k” people anchored to years ago-likely sits well above that level today. For traders, miners, builders, and institutional allocators, evaluating Bitcoin in real terms leads to better signals, smarter risk management, and a clearer read on where we truly are in the cycle.