Indicator Overview

The Bitcoin Inflation Backtester is a macro-economic evaluation tool designed to visualise the difference between Bitcoin’s market price (Nominal) and its actual purchasing power (Real) when adjusted for a specific annual inflation rate. By accounting for the cumulative erosion of currency value, this indicator provides a clearer picture of how Bitcoin performs as a store of value against various inflationary regimes.

The chart plots a white line representing the standard exchange price and a primary orange line representing the inflation-adjusted price. As time progresses, the gap between these two lines — the "Purchasing Power Delta" — expands, highlighting the hidden cost of holding fiat currency versus an asset that historical data suggests acts as an inflation hedge.

How To Use

Investors and economists can use this tool to determine the real rate of return on their Bitcoin holdings after accounting for the expansion of the money supply or the rising cost of living.

• Custom Inflation Input: Users can input a specific percentage rate to model different scenarios. While the official Consumer Price Index (CPI) often claims to hover around 2-4%, many analysts prefer using the M2 Money Supply growth rate (historically 8–15%) to see how Bitcoin preserves wealth against true monetary debasement.

• Purchasing Power Loss Stat: The stats panel displays the percentage of value that has been "stolen" from a dollar since the chosen start date. This highlights why an asset’s nominal price must rise significantly just to maintain the same real-world utility as it had years prior.

• Dynamic Base-Dating: By changing the Start Date, you reset the benchmark year. The further back you set the date, the more pronounced the divergence becomes, illustrating the long-term compounding effect of inflation on your capital.