Bitcoin has an inflation rate positive of 0.83 %. Bitcoin’s inflation is extremely low compared to the dollar’s peak of 9.1% in 2022. However, when we compare the cumulative inflation rate for both Bitcoin and the US dollar, we see the true strength of Bitcoin’s role in preserving wealth.
Bitcoin rose by approximately 960% from 2020 to 2025. In nominal terms, the US Dollar Index DXY, which measures US dollars against a basket or other currencies rose only 12%.
Bitcoin’s inflation-adjusted price and the DXY, normalized for inflation, provide critical insights into the real value dynamics of both assets. The nominal DXY is a measure of relative strength in the currency, but its inflation-adjusted price highlights the erosion of purchasing powers.
In the face of macroeconomic uncertainties, DXY is currently trading at 109.8. However, when adjusted for cumulative US inflation since 2020—averaging over 2% annually and peaking above 8% in 2022—the real value of the DXY drops to 87.5. This represents a 22.3-point difference, or roughly 20.3% of the nominal value, illustrating the dollar’s substantial loss of purchasing power over time despite its relative strength against other currencies.
Bitcoin’s nominal price, meanwhile, is around $91,000. Adjusted for its low supply inflation—1.74% annually from 2020–2024 and 0.83% in 2025—its inflation-adjusted price stands at approximately $84,365. The $6,635 difference represents only 7.3% of its nominal value, stressing Bitcoin’s relative stability and ability to preserve purchasing power over time compared to fiat currencies. This smaller adjustment highlights Bitcoin’s programmed scarcity and low inflation as key factors in its resilience.
The difference between inflation-adjusted DXY metrics and Bitcoin highlights a larger narrative. While fiat currencies like the dollar face significant devaluation due to inflation, Bitcoin’s controlled supply forces position it as a hedge against currency debasement. DXY has a more marked inflationary impact, which highlights how difficult it is to maintain purchasing power when using a fiat-based system.
It is important to understand the difference between nominal metrics and inflation adjusted metrics when evaluating long-term asset values. The DXY’s nominal strength masks the fundamental erosion of the dollar’s purchasing power, while Bitcoin’s inflation-adjusted price reflects its ability to maintain value over time. These insights highlight the need for inflation-adjusted macroeconomic analyses to help develop strategies that are effective.
To identify the exact divergence, it is also important to consider the inflation rate of the comparison currencies that were used in establishing the DXY. However, the above figures give a ballpark assessment of Bitcoin’s elevated strength against the dollar beyond nominal terms.
By 2020, $100 invested in Bitcoin would equal $927 in purchasing power, while $100 invested in DXY in today’s terms would amount to just $91 dollars.
Post in: Analysis, Bitcoin, US The Author 
Liam ‘Akiba’ Wright
Also known as “Akiba,” Liam Wright, a journalist, is also a podcast producer and the Editor-in Chief at CryptoSlate. He is a firm believer that the decentralized technologies have the power to bring about positive changes.
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