BITCOIN IS ON SALE!
If you’re watching Bitcoin’s price, you may have noticed that it’s selling at a pretty big discount. (Over 65% from an all-time high price of ~$69k).
Yes, this is nothing new to Bitcoin’s US Dollar rate. We’ve seen multiple 80%+ corrections in the past. (And it’s always recovered 😏)
However, what’s unique about this major dip is the inflationary environment we are in. Central banks around the world have been printing money at rates never seen before. Money printer has been going brrrr like crazy these last 2+ years.
Bitcoin’s price is hovering around $20k. That’s around the same price as last cycle’s top in 2017. However, $20k today isn’t the same as it was 5 years ago. One has to account for inflation, causing the dollar to have less purchasing power than it did in the past.
This leads to the question…How do we know how much Bitcoin is worth today in terms of the inflation-adjusted historical exchange rate?
Luckily Jameson Lopp @lopp created four inflation-adjusted charts of Bitcoin's historical exchange rate.
Chart 1 - 2009 Dollars
This chart adjusts the USD value to that of the dollar in January 2009 when Bitcoin was created; the USD value is adjusted monthly based upon CPI data from the Federal Reserve.
The current BTC exchange rate adjusted to the value of January 2009 USD is $15,843.
https://www.lopp.net/bitcoinflation/exchange-rate-2009-dollars.php
Chart 2 - M1 Money Supply
This chart adjusts the USD value based upon the change in the M1 money supply that has occurred since January 2009 when Bitcoin was created; the USD value is adjusted monthly based upon M1 data from the Federal Reserve.
The current BTC exchange rate adjusted to the M1 supply of USD in January 2009 is $1,729.
https://www.lopp.net/bitcoinflation/btc-usd-m1.php
Chart 3 - M2 Money Supply
This chart adjusts the USD value based upon the change in the M2 money supply that has occurred since January 2009 when Bitcoin was created; the USD value is adjusted monthly based upon M2 data from the Federal Reserve.
The current BTC exchange rate adjusted to the M2 supply of USD in January 2009 is $8,559.
https://www.lopp.net/bitcoinflation/btc-usd-m2.php
Chart 4 - M3 Money Supply
This chart adjusts the USD value based upon the change in the global M3 money supply that has occurred since January 2009 when Bitcoin was created; the USD value is adjusted monthly based upon M3 index data from the OECD.
The current BTC exchange rate adjusted to the global M3 supply of all fiat currencies in January 2009 is $8,888.
https://www.lopp.net/bitcoinflation/btc-m3-adjusted.php
What does this all mean?
BUY THE FUCKING DIP (BTFD)
Are we at the bottom? Can bitcoin go lower? Who knows…
What we do know is Bitcoin is at a major discount right now. Bitcoiners that are lifetime accumulators are jumping with joy. More sats per dollar!
Get Stacking! Your future self will thank you.
*The price of Bitcoin was $22,300 during the time this article was written. Exchange rates in the article are subject to change.
Bitcoin Uptime by Year
2010 99.90%
2011 100%
2012 100%
2013 99.93%
2014 100%
2015 100%
2016 100%
2017 100%
2018 100%
2019 100%
2020 100%
2021 100%
2022 100%