Bitcoin has consistently outperformed the US dollar in almost every year since its creation.
Bitcoin, the leading cryptocurrency, has shown remarkable growth and long-term utility as an asset class. In its 14-year existence, Bitcoin has only experienced price declines in four years. Today, Bitcoin reached its all-time high of $72,000, representing a yearly increase of over 260%. However, this is not the only time Bitcoin has seen significant yearly gains.
Since Bitcoin first started trading in March 2010, it has only recorded an annual decline in 2015, 2019, 2022, and 2023. On the other hand, the USD has consistently experienced an annual inflation rate, resulting in a gradual decrease in purchasing power over time. The inflation rate has fluctuated, with periods of higher inflation, particularly in the early 2020s, due to economic challenges such as the COVID-19 pandemic and subsequent recovery efforts. This inflation erodes the value of money, meaning that a dollar in 2009 has less purchasing power in 2024.
Bitcoin’s track record since its introduction through Satoshi Nakamoto’s groundbreaking whitepaper has shown no years of deflation, indicating an increase in purchasing power. In contrast, the USD’s purchasing power, being the most widely traded fiat currency, has decreased every year for the past 14 years.
The stark contrast between Bitcoin’s exponential growth and the USD’s declining purchasing power due to inflation highlights the fundamental differences between a decentralized cryptocurrency and a fiat currency. Bitcoin’s rise demonstrates its increasing acceptance and the speculative interest it generates, as well as the ongoing discussions about its role as an inflation hedge.
Meanwhile, the inflation rate affecting the USD emphasizes the impact of centralized economic policies, supply chain dynamics, and global events on traditional currencies.
