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220 sats \ 10 replies \ @Undisciplined 7 Mar \ on: No, bitcoin didn't really hit an all-time high. Here's why econ
While adjusting for inflation may superficially seem appropriate, it actually doesn't make sense in this context. We're talking about exchange rates, not purchasing power. If the conversation were about purchasing power, then the ATH would happen at the same time everywhere.
Adjusting for inflation is assuming a fiat perspective.
Do you put much faith in the government stats?
Every time I hear somebody adjusting for inflation, I mentally translate that to "I adjusted the numbers by made up numbers, to make a less relatable number".
There is just so much irony, and newspeak, in calling the adjustment "real".
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No, but that wasn't really my point. Even if the numbers were "correct" (whatever that would actually mean), it just doesn't make sense to adjust one side of an exchange rate for inflation.
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I might disagree that inflation adjustments make the number less relatable. It at least adjusts it in the right direction usually, right?
The problem is that it's used to gaslight people about how the economy is doing.
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This!
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"Gaslight" is the key word for this article, indeed.
There’s just one problem: Adjusted for inflation, Bitcoin is actually worth less than it was three years ago.
This sentence calls to mind one of Mark Twain's timeless quips, "There are lies, damn lies, and statistics."
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Ha ha ha cold hard facts!
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I haven’t looked at it that way before, makes sense. There is also real inflation not the made up government number!
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Yeah, this article's consideration is for the "bitcoin as an investment" class. It also looks like a sales pitch to convince people to continue investing in the inflated equities market.
"For example, we can compare Bitcoin’s price to a fund that just tracks the performance of the overall stock market, like the SPDR S&P 500 ETF. When you adjust for inflation, that fund was worth a little over 1.5% less on Tuesday than it was three years ago. That means if you bought $10,000 of Bitcoin at its peak, your money would be worth about $9,050 today. If you bought $10,000 of the SPDR S&P 500 ETF at the same time, it would be worth $9,850. Inflation hits old-school investments the same way it hits Bitcoin, but this time around, you would have been better off investing in the regular old stock market."
What a joke!
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Fair counterpoint! Bitcoin shifts the lens for purchasing power. 1 Bitcoin = 1 Bitcoin
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