Topic: Bitcoin and gold price inflation adjusting all-time-high (Read 398 times)

Your last paragraph is what I didn’t get you said that gold has reached its all time high in the US dollars but that its real value has not reached an all time high. I didn’t get that last paragraph, so if it’s not the US dollars what then is the real value of gold calculated by? EUR or something else that is not really a currency?

I don’t know for you, but as for me, whatever value you’re seeing them in the USD, that’s their value. Bitcoin reached all-time high, and it did for real. What you’re seeing there is the real value, if it’s not then I don’t know what’s the real value for you

Comparison has been made due to the efficiency for long term investment but the different between those both asset is bitcoin is unstable which can move more faster and the gold got   quite low movement, for now  many prefer bitcoins due  to profitability and the current state on the market but I think it cannot defeat the stand of gold since this is more secure and easy to understand by people.

Inflation is not your enemy, it is not your friend neither, it is the nature of the current financial system that we can't imitate away from, it is not something nice, neither something hurtful neither when you can actually use it properly.

When you have 2% or under inflation (not negative) you are growing and when you grow everything grows for your nation as well, but when you have 500%+ inflation like some destroyed nations, that is going to have irreversible affects, for a long time at least.

However, even with the 2% and under we need to reconsider what we are talking about with the inflation, sometimes nations calculate it based on things that are not basic needs, if that is the case for house, car (or transportation in general) food, bills and so forth, that would mean that we are doing fine, but sometimes they consider it based on tennis balls and bike prices and carpet prices, which shows good inflation where in fact it is not at all.

Gold is always or constantly getting expensive over a period of time but bitcoin is different because it can move faster and can dump too faster depending on the demand from the bitcoin users. However, I can compare that bitcoin is more like gold in some other way due to the fsct that both assets now are in bullish trend. Well, I wish both asset will be gone good especially bitcoin for where most of us here in the forum wanted too. The higher the market of bitcoin will get the higher profit also bitcoiners will get.

Interesting article. Many people say that gold is constantly increasing in value, but few people take inflation into account. Indeed, if we take into account inflation, it turns out that the price of gold has not increased much. In general, I am not a fan of stock markets, cryptocurrencies are more interesting for me in this regard. On the stock exchange, a 10% increase in price is already a big indicator of price growth, while cryptocurrencies can rise in price much more, which is more attractive for short-term investors.

All time high should never be used to measure the growth because it will help the prices to dump more once it reaches new all time high. Well it looks interesting read though which maybe helpful for budding investors to know the importance of investing their money because it depreciate its value day by day.

If we will break 20k then we will break 21k too for sure. However, it may be harder than looks like

If bitcoin and gold prices rise it will have an effect on gold and not on bitcoin when the dollar weakens gold imports become more expensive more dollars have to be paid for importing goods and services besides bullion dealers the government also has to pay more for gold. The strengthening of the dollar means a decline in the price of gold the depreciation of the us dollar also hints at inflation it is the tendency of the common man to build gold as a safe haven when paper money is under threat the rise in inflation is good for gold prices and the price of inflation controlled gold can become extremely positive if confidence in the economy is completely eroded.

The point isn't to calculate profits with inflation, it's to strip out the price appreciation attributable to the depreciation of the dollar so that you're comparing actual investment returns based on the purchase price of the asset vs. when you first invested.  If bitcoin is worth $10k when you buy it but $50k when you sell it but the cost of everything denominated in dollars is 5x more expensive too, you haven't actually gained any additional purchasing power.

Also, nobody holds significant amounts of cash for significant amounts of time, so the inflation concern of the USD is overblown. Nobody suffers near the inflation rate that's constantly quoted because any significant wealth is constantly invested and not kept in cash.

Certainly. And this is the fallacy that a lot of investors tend to fall prey to.

Gold bugs such as Schiff seem to believe that no matter what your point of entry is, as long as you get your hands on gold, you are guaranteed a long term profit. This is completely untrue given the fact that gold has not outperformed the CPI over the past 5 decades even when its current price is at an all time high.

A similar logic should be applied to BTC if you are a truly 'intelligent investor' (quoting Ben Graham here). Even though BTC is a good store of value in the long run, there are no guarantees that it will be if you buy at peaks and sell at lows. Even if BTC markets go up long term, if you engage in that type of counterproductive trading, you could lose money on your position even if the wider market make sizable gains.

And don't think that just because inflation is low these days, it can be ignored. History has shown that future inflation is more likely to be mean-reverting, not to be extrapolated from the past.

Based on the explanation in the opening post, it means Bitcoin and Gold have not returned to the all time high price,
because we forget that the US Dollar used to display the value of Bitcoin and Gold has inflation. So because the inflation
against the US Dollar displayed now is not the real value of Bitcoin and Gold, this is very interesting. Because I also just
realized it after reading the explanation in the opening post, meaning Bitcoin will need to reach a price of $ 21,131 to return
to its true real value.

This happens every time Bitcoin goes on a crazy upward streak. In any short term period, you can find plenty of instances where this happens but if you zoom out you will probably find the trend largely remains intact. It's because gold is not as volatile and there's a lot more of it, and it's just not nearly the speculative vehicle Bitcoin is. It's a lot easier to move something with a significantly smaller market cap, as Bitcoin has compared to gold. As always, when you start and stop the data collection and comparison will materially affect the conclusion.

I honestly believe that if we could find a way to just take the peaks of these prices we could manage to make it look bigger in the future as well. If we take 10k today instead of 19k like it is, and calculate it 50 years down the road when it is 100k or more, we are going to look like today's 10k worths more. However nobody talks about the fact that we are not getting free money for our money anywhere, if I have 10 dollars today, in 50 years time it will still be 10k and it wouldn't worth anything whereas if I have 1 bitcoin, it will be valued a lot more.

Hence I think when you calculate your profits with inflation you are doing something wrong, because normally your money doesn't gain anything when it stands there idle, which means no matter how much you can gain, it is better.

I don't really think about it. For me, investing in crypto especially in Bitcoin is still more attractive than gold. Even if there will be inflation in the US dollar, I think crypto will be fine. Because all control in crypto investing rests with each coin holder.

it makes sense if calculate the price + inflation rate every year, although people will agree that $20k is the ath, except in term of the value, it does not recover yet.
Gold almost hit the recovery point as well although it takes a long time compared to bitcoin, can't say it's the same thing as the adoption is different, the value is also different.
And all this happens because the Pandemic is one of the factors that affect how the market preserves their funds, the government print so much money and economic downturns lead to devaluations.

I wouldn't even see bitcoin and gold coupled in any sense though. OP suggests relation based on USD which forms base unit to know the values for gold and bitcoins. That's like asking how much liters of water in a bucket or how much litres of coca cola in the bucket.

Both the entities are completely different I would say and holds the unit value based on their taste. Gold is like water, simple, universal traditionally known yet capitalised with government control.

On the other hand, bitcoin is like secrete recipe of coca cola, tastier, widely loved and capitalised based on the public accounts.

So you see that's the thing about their relationship.

Makes sense to calculate things in inflation obviously. I doubt that $20k worths that much care because it was only few years ago and another thousand isn't really that big of a deal in bitcoin since it moves a lot higher and lower in numbers when gaining and losing compared to gold.

However gold deal is definitely something to behold, and could be some sort of explanation to why investing into something that would yield you profit very little over course of many decades is not really the greatest idea because at the end of the day you are not really making a profit, you are just avoiding losing your worth and even if that is something cool, I feel like that is usually not enough for people who want to get richer.

We cannot compare the value of gold and the fiat currency. Fiat currency value will depend on the economy of a certain country not like in the asset for example gold that can be valuable over a period of time due to limited supply of resources and many people wanting to have gold which availability of it could be difficult to get due to its process which is mining and there are only few are allowed to do so. So, asset will tend to be more valuable than fiay currency but if people do not like and will be dumping their gold then that gold will have low or no valu at all same goes to bitcoin. Bitcoin is a new gold.

Well, the only thing that differs between the two is that gold is a precious metal that can be touched physically and has no limitation in supply unlike with bitcoin it is pure digital with limited numbers to be mined and IMO these two became comparable only in terms of mining, assets, -- and investment and for some reason I don't go against those people who keeps on comparing them since both are worthy to be invested in or to be owned. As a matter of fact, OP's topic is really interesting, that by knowing the difference of ATH in price and in the value we can therefore distinguish who among the two is more capable of surviving in devalue and inflation of an asset towards any other currency.

Bitcoin has been compared and contrasted to gold for the longest time due to a number of reasons. Personally I don’t see some of these as relevant considering that they are entirely different entities that could care less of what the other one’s doing. But anyways, I don’t think people could care that much to know how much their investment was worth a decade or so ago if inflation was taken into account. Most of them just care about present monetary values of their investments and that’s it, though I agree that people should know how it affects their ‘worth’ actually to better undestand the dynamics of currencies as a whole and make moves accordingly.

Bitcoin may be differ from Gold.But bitcoin is a new and attractive asset then gold.From gold we can't get more profit and from bitcoin we can easily earn from it.Sometimes their may be huge fall in bitcoin price, it's doesn't mean bitcoin is a unstable crypto currency. Now the price of bitcoin had reached 19k$ again and made the people to realise the value of bitcoin.

Your first paragraph I am not getting it, how does the price of Bitcoin and gold being displayed in fiat make us not to know the value of it? You’re not serious, if the value is not calculated in fiat, then what should it be calculated in,  Will you calculate BTC in BTC, or Gold in Gold? Every asset is being weighed with another asset, so it’s going to be BTC/USD and Gold/USD, and not BTC/BTC or the other.

Without it being calculated that way, in fiat, you wouldn’t know the value of it. Lastly , both are on their way up, although I wasn’t aware that Bitcoin reached the $21k price you listed here, the last ATH in 2017 was around $19.7k and the new ATH I know that happened recently on November is $19.8k.

I think I saw bitcoin trading as high as $24k on africa's golix exchange in 2017. Markets are considered accurate at setting prices. But there is no finite timeline for how long it takes for undervalued or overvalued assets to normalize to a correct value. Inflation is a particularly touchy subject due to its distribution side(into whose hands does newly printed fiat go). And the insistence of experts to redefine what terms like unemployment and inflation mean on a fundamental level.

If you're interested in inflation, you might find this interesting.


Inflation could be a very relative statistic for many reasons that aren't easy to define.

Gold and Bitcoins are two different things for gold is a physical thing that you can touch yet bitcoin is a digital one but comparing the two doesn't seem to be too bad for me since both are assets which people are investing and I guess if we compare the value of the two, as well as their ATH people, would be aware which one is more capable to cope up in terms of inflation and value.

OP is right we need to identify and meet the real ATH in value for ATH at price is only a figure but the value of it that correlates to the importance and purchasing power is much important and since we haven't reached the ATH in the value we still need to wait a little longer before we can claim that we have reached the new ATH for bitcoin.

In any case, the demand for gold in the world is growing rapidly, especially given the development of high technologies. But one must take into account the fact that due to the economic crisis, as well as the depreciation of national currencies, people are investing in assets that are more understandable for them. Thus, someone chose to invest in bitcoin, and someone trusts gold more, because its volatility is not as high as that of bitcoin and there is an opportunity to keep their savings without risk.

I don't think it's even a good idea for Gold to increase in price like Bitcoin in this world population and its high usage/demand for gold for lots of purposes like manufacturing. That kind of extreme price increase is more suitable for things used just for money.

If anyone is interested in investing in Gold probably the easiest way would be to buy PAXG https://coinmarketcap.com/currencies/pax-gold/. Price is 1:1 to Gold.

Why do you compare the different scales? It's like saying that one person outperformed someone at eating 100 Hamburgers, while the other failed because he could not run 100 kilometers.
When gold is close to peaking at $ 2,100, it does not mean that Bitcoin will do, there is no connection between the two things.
The intensive printing of money for this year will have its effects evident in the coming year, as the price of many things will increase and paper money will begin to decrease in its actual value.

Inflation is measured annually, so 2017, the year when Bitcoin hit its ATH/previous ATH, shouldn't be included in this calculation , because the ATH was reached in the last month of the year. By removing these 2.13%, the argued price can be adjusted to $20,790.

Anyway, comparing Bitcoin with gold is not a good idea, gold has been an asset for thousands of years, Bitcoin is just 11 years old and it goes through the phase of rapid price growth as more investors discover it - but this will end at some point, and only then comparison with gold will become more fair.

OP, I agree that all-time highs should technically be reported in "today's dollars", kind of like how box office performance for movies is used to compare blockbusters from different eras.  But as far as bitcoin is concerned, so far it's not relevant (as far as I know) because a dollar in 2020 is probably worth close to what a dollar was worth in 2009, i.e., inflation over the last decade hasn't devalued the USD dramatically.  Again, that's with the qualification of AFAIK, because I don't know what the data actually is.

But it is relevant to gold, which has been subject to market forces ever since the gold standard was done away with.  However, this is not a gold forum but a bitcoin one, and there have been too many comparisons between the two ever since bitcoin was created.  Bitcoin isn't gold.  It's not digital gold either IMO, though a lot of others may disagree.

Sure, gold is a safe-haven asset.  Right now people are speculating on very risky investments, including bitcoin, and they're staying away from precious metals for the most part.  And you're damn right, "digital gold" is indeed cheesy as hell.

Gold is decoupling from bitcoin price rise and is actually doing worse than BTC for the first time since it's inception.
So bitcoin is essentially the new digital gold as cheesy this term from many years ago sounds.
The all time high for coinbase is close to the one which is $19,999 from gemini but basically the same just off by around $100 is all.

I think you will find this interesting. Normally the price of bitcoin and gold are displayed in USdollars while this could make use not to know the real worth of an asset because US dollar is fiat and subjected to US government controlling the price. Although, US dollar is a very strong currency, but in the past, it has been subjected to depreciation, fiats are just depreciative currency.

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Gold reached a price of $678 U.S. dollars in 1980, according to a breakdown from Visual Capitalist. Accounting for inflation, based on calculations from Officialdata.org, $678 in 1980 held the same buying power as approximately $2,142 in 2020. The precious metal technically broke its U.S. dollar all-time high this year, hitting $2,075, according to TradingView data. Its 1980 record purchasing power level remains unbroken, however. Since its push to $2,075 in August, gold has retraced in price, sitting near $1,778 per ounce at the time of publication.

Bitcoin hit its last all-time price high in 2017, tagging $19,891.99, according to Coinbase’s price index. Accounting for inflation, Bitcoin’s record high stands at $21,131.02 in terms of value, Officialdata.org indicates. U.S. dollar holders lose approximately 2% of their purchasing power per year on average from inflation. Official data reveals 2.13% inflation in 2017, 2.49% in 2018, 1.76% in 2019 and 1.86% in 2020. “If you bought #Bitcoin at the top in December 2017, you won’t truly recover your buying power until we hit 21.24k,” podcaster Vlad Costea said in a tweet on Tuesday. Costea used $20,000 as Bitcoin’s high, putting the numbers and dates into an inflation calculator to determine the most accurate figures.

Taking U.S. dollar devaluation into account, gold has still not reached the all-time price high it set in 1980.
https://cointelegraph.com/news/gold-and-bitcoin-eye-inflation-adjusted-all-time-highs-but-it-s-taken-gold-40-years
https://cointelegraph.com/news/will-money-printer-go-brrr-rob-bitcoin-of-its-all-time-high

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We should be able to differentiate between all-time-high in price of assets which is usually in US dollar and the real all-time-high in value. Gold was able to reach all-time-high in price if compared to UD dollar this year, but in real value, gold has not reached all-time-high since 1980. While bitcoin in just three years reached all-time-high today in price in US dollar but not yet reached all-time-high in real value as it needs to get to a price of $21,131.02 as a result of US dollar inflation too, but very possible this will only be achievable in just less than three years.