More than $69,000: What real price does Bitcoin need to reach to surpass its all-time high?

As Bitcoin continues to rise, crypto watchers are hotly debating when the number one cryptocurrency will reach and surpass its all-time high – but a lot has changed since November 2021.

According to CoinGecko, should the price of Bitcoin return to its peak of $69,044 per coin, it would do so under very different market conditions, including the inflation rate that has since prevailed in the United States. Would the actual goal then be closer to $75,000?

This is the US Bureau of Labor Statistics inflation calculator for the Consumer Price Index (CPI), which would be the price of one Bitcoin worth today in November 2021.

After reaching these stellar highs, Bitcoin lost more than half of its value in a steady decline as the crypto bear market began. A year after reaching its all-time high, Bitcoin's price was at $17,586. Still, inflation remained high – hovering between 4% and 8% per year – while Bitcoin slowly climbed back above $30,000 last April and above $40,000 in December to reach its current level.

Another factor: Inflation grew faster than the available supply of Bitcoin over the same period. As of December 2021, the total supply of Bitcoin was 18,915,566. This amount has since increased by 713,707, or approximately 3.8 percent, to 19,629,263 (as of February 2024).

Since Bitcoin is often positioned as an “inflation hedge” – an investment designed to protect against a decline in the purchasing power of money – one might wonder how the top cryptocurrency has performed during the current US inflationary period. A recent r/Cryptocurrency post on Reddit sparked a heated debate about this question.

Such calculations must also take what is to come into account Bitcoin halvingAs the name suggests, this halves the amount of Bitcoin that miners are rewarded with. The impact of this milestone on the future price of BTC is hotly debated.

Given all this, have the goal posts moved?

No, replies David Waugh, economist and senior analyst at Bitcoin financial services company Coinbits.

“All-time highs are almost always measured in nominal terms and not in real terms. Therefore, the claim that Bitcoin price needs to break its previous all-time high, adjusted for inflation, is comparing apples to oranges, not apples to apples,” Waugh told Decrypt.

According to Waugh, a meaningful measurement of Bitcoin's dollar exchange rate requires adjusting all-time highs since its inception in 2009 for inflation and comparing each new high with the previous inflation-adjusted value.

Nevertheless, according to Waugh, there is reason to believe that the price of Bitcoin will rise significantly in 2024.

“Spot Bitcoin ETFs are generating massive inflows and exerting positive price pressure as issuers purchase BTC to fill orders,” Waugh said, noting how BTC allocations are transforming traditional ETF portfolios. “This additional source of demand creates a flywheel for Bitcoin adoption as BTC allocations become normalized in financial markets.”

In addition to ETFs, Waugh continued, Bitcoin companies that develop Layer 2 solutions for the Bitcoin ecosystem and consumer-focused products would make Bitcoin more useful and accessible to consumers.

“Watch for more 'killer apps' in payments, banking and fintech to integrate Bitcoin into their offerings, driving adoption and putting additional positive price pressure,” he said.

Edited by Ryan Ozawa.

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