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U.S. dollar loses 97% of its purchasing power against Bitcoin in the last 5 years

U.S. dollar loses 97% of its purchasing power against Bitcoin
Jordan Major

Since its inception, Bitcoin (BTC) has attracted a growing number of investors who see the flagship digital currency as a hedge against inflation.

As of Tuesday, February 15, 2022, the United States Dollar (USD) has lost up to 97.58% of its buying power relative to Bitcoin in the last five years. Thus, when comparing the value of one dollar to Bitcoin, 1 USD is now worth just 0.000023 BTC.

Purchases of satoshis show that the US dollar’s value has fallen as a consequence of the government’s continuous money printing.

United States Dollar purchase power against BTC. Source: Google

Particularly, the function of Bitcoin as a viable alternative to the dollar has been put to the test, but the fact remains that inflation has already reduced the value of the United States dollar by 85% over the last 50 years.

In contrast, Bitcoin’s value has stayed relatively high, although making it difficult for the typical investor to acquire a single unit of the cryptocurrency; as a result, most investors choose to purchase fractional shares of the world’s most valuable digital asset.

$1 buys 75% less satoshis than 2 years ago

Accordingly, as the dollar’s buying power has weakened, the quantity of satoshis that can be bought with the US dollar has continued to decline, in contrast to the rise in the value of Bitcoin.

It is worth noting that according to a recent Finbold report, between February 1, 2020, and February 1, 2022, the number of satoshis that could be purchased with one US dollar dropped from 10,656 to 2,638, a fall of 75.24%.

This figure is obtained by multiplying the price of Bitcoin in dollars by 100,000,000, which is the value of satoshis in Bitcoin.

Despite periods of significant market volatility, the decline in the number of satoshis that a dollar can purchase has been associated with Bitcoin’s over 300% price increase over the previous two years.

Bitcoin price analysis

Currently, BTC is trading at $43,861, up 3.91% in the last 24 hours and down 0.83% in the last week, according to CoinMarketCap data.

1-day BTC price chart. Source: CoinMarketCap

With a total market worth of $831.5 billion, Bitcoin has a total of 42.3% dominance of the entire crypto market.

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