Bitcoin has finally surpassed $70k US mark after it previously touched $69k on some exchanges in 2021. At the time of this writing, Bitcoin is convincingly above $70k - $72k and change, and headlines are rolling in touting this as seminal moment in Bitcoin history.

Unfortunately a lot has changed economically since 2020 Covid 19 stimulus and stay-at-home era. Prices for high ticket items such as cars and houses have inflated substantially and currently sit at new all time highs against the dollar. What would be the 2021 Bitcoin high adjusted for inflation?

According to U.S. Bureau of Labour Statistics, 2022 saw the highest inflation in 40 years - 9.1%. 2023 was more manageable but still somewhat uncomfortable 3.9%. Ignoring the remainder of 2021 (69k high was reached near the end of the year) and beginning of 2024, this would yield inflation adjusted all time high of 78.2k.

But it gets worse than that. Government is incentivized to underreport inflation, because inflation is one of their main sources of revenue. This source of revenue only works as long as people are still willing to trade their labour and goods for the money that government prints. Alarmingly high year-over-year inflation figures would erode trust in national currency.

The real rate of inflation for post-Covid era is estimated by some to be double what the official figures suggest. For certain asset classes such as property, it could be triple. For Bitcoin to "feel" as expensive as it did during height of 2021 bull market, it has to be worth at least $80k, probably closer to $90k.

Incidentally, I sense none of the same euphoria that I witnessed in prior bull runs. At least among private investors. Today most of the FOMO is happening among corporate buyers. Introduction of Bitcoin spot ETFs has made it possible for companies to purchase exposure to Bitcoin in the same way that they would purchase regular stocks or stock-based ETFs. This alleviates all of the complexity in accounting and custody of "physical" Bitcoin.

Meanwhile the private investor seems more nihilistic and unenthused - perhaps licking his wounds from losses in the recent altcoin bear market that only now is beginning to slowly turn around.