Bitcoin Stagnates despite Surpassing $20,000
Bitcoin (BTC) has remained at the $20,000 mark for nearly six years since it reached its all-time high in 2017. However, when adjusted for inflation, the price performance of BTC tells a different story. As of August 25, 2023, $20,000 worth of BTC purchased in 2017 is only worth $24,942.
Bitcoin's Static Price Action
Despite reaching as high as $69,000 in the past, the current Bitcoin spot price of $26,050 reflects a lack of significant growth in BTC price over the past six years. Inflation-adjusted, BTC is only slightly above its 2017 market peak, highlighting the cryptocurrency's limited value as a store of wealth.
Bitcoin's Ability to Store Value
Some observers note that Bitcoin's stagnant price indicates its ability to function as a store of value. However, others suggest that the real value of BTC may be even lower than its previous cycle peak, emphasizing the need for caution in investing in the cryptocurrency.
Inflation Concerns and Federal Reserve Policy
The issue of inflation in the United States continues to be a major concern for investors, including those in the crypto market. As data suggests a slowdown in inflation, many are hoping the Federal Reserve will take action to align policy with the economic reality. The upcoming policy statement by Fed Chair Jerome Powell at the Jackson Hole Economic Symposium is eagerly awaited by those hoping for a change in the current BTC price status quo.
Potential Volatility and Lack of Liquidity
Some experts warn of potential volatility in the BTC market, with a possibility of the price testing lower lows. The BTC/USD order book on Binance shows a lack of significant liquidity above $25,000, increasing the likelihood of rapid price movements.
Note: This article is for informational purposes only and does not provide investment advice or recommendations. Readers should conduct their own research and exercise caution when making investment decisions.
