Inflation of the Traditional Currency has Cost BTC Holders 20% in the Last Ten Years

News • 2020/10/07 • by

The rise in the bitcoin price in the last ten years may have been overemphasized due to fiat inflation since bitcoin is expressed in fiat, US dollar, mostly, which will also experience depreciation at some point.

During the decade that came after the economic crises, the US experienced a record low inflation rate ranging between 2% yearly. However, over the years, this increased to about 20%. This implies that the current price of BTC at $10,466 will experience dump to $8,770, using the 2010 dollar as the base and the depreciation that followed.

Looking at BTC and the US dollars over the last ten years, $1 invested in the USD would have turned to 84 cents while BTC would have yielded a whopping $274,000 with the same amount of investment.

BTC is not also free from inflation; however, if the rate of fiat currency inflation maintains a minimum, BTC will keep appreciating at a rapid pace, which we have experienced until recently.

Source: Cointelegraph.

Comments (5)

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freshprinx

6 years ago

that is a cool news peradventure

godgrace1

6 years ago

i will be waiting for the depreciation of btc so i can invest and HODL it for profits

exodusab

6 years ago

But do most people really understand how inflation works, or how the rate might change as the coronavirus pushes the global economy toward its worst recession since the early 20th century? Maybe it’s because of the daily headlines about new U.S. government aid and bailout programs in each country, and about the money freshly printed by the CBN, Federal Reserves to finance them.

visiblemoney

6 years ago

I do not go with the opinion of this analyst. The value of Bitcoin should never be compared to the value of USD fiat, both are running on parallel ideologies. Bitcoin would be said to have achieved its purpose only after the demise of fiat across the leght and breadth of the world because its pivot point is to leverage technology to serve borderless and unbanked sectors. The problems of inflation or overestimate of values do not even arrive with Bitcoin yet! Going by the last halving event, the mining fees dropped from 12.5 to 6.25 deflating Bitcoin below 2% inflationary index when compared to USD as at July 2020. The humungus development being made by developers of Bitcoin inspire of resistance from the authorities have not even earned 10% of its value worth as at this commentary. The forces of the demand and supply for the king of crypto is just beginning to sustain fair ground to maintain slight price stability at the moment while the whole community gropes in high expectation to see a magnanimous bull that will set another market price record moving away from 2017 historical price.

omogbai

6 years ago

Bitcoin is not immune to inflation either, but that might over complicate the story somewhat. As long as the fiat inflation rate stays low and Bitcoin continues to appreciate at a rapid pace that it has done until recently, the effect of fiat inflation may be negligible for most investors.