Bitcoin is going up because it appreciates in value, but also because there are more dollars. How could we track the value increase of Bitcoin while accounting for the dollar devaluation? Another way of formulating that question is: How can we track the purchasing power of Bitcoin?
Historically, the price of gold has kept up with the growth of the money supply. (See Lyn Alden's core gold model) Gold is a well-established store of value. Measuring the price of Bitcoin relative to the value of gold is a way to keep track of its purchasing power. That is what the first graph plots, the cost of Bitcoin denominated in grams of gold .
- The last ATH was 484.76 grams of gold .
- On Nov 16, the resistance of 303.07 grams was crossed, putting the price on a trajectory to reach the previous ATH .
- Bitcoin still needs to rise another 25% to make a new ATH in gold terms.
You can add the AU usd/grams levels to a chart with this indicator gold price levels denominated in usd/grams