Dollar's Century-Long Erosion Fuels Bitcoin Comparison

The US dollar has seen its purchasing power decline by nearly 97% since the Federal Reserve was established in 1913, according to data from the Bureau of Labor Statistics. This long-term erosion is fueled by a century of inflation, including two world wars, high-inflation periods, and sharp price increases.

The CPI-U index shows that $1 in 1913 has purchasing power equivalent to approximately $33 to $34 in 2026. This means one 1913 dollar would only buy about 3 cents worth of goods at today's prices.

Bitcoin supporters often point to this decline as evidence of the need for alternative stores of value, like the scarce digital asset Bitcoin. With a maximum supply of 21 million coins and a predetermined issuance schedule, Bitcoin is designed to reduce the creation of new BTC over time.

However, Bitcoin carries significant short-term volatility, with repeated declines of 50% to 80% during individual market cycles. As of early September 2026, Bitcoin trades near $79,852, below its October 2025 record of $126,080. Despite this correction, BTC has risen more than 59,000% since its early trading history.

The growth in institutional adoption has transformed Bitcoin's investment profile, with US spot Bitcoin ETFs launched in 2024 allowing pensions and financial advisers to gain exposure without directly managing private keys. These ETFs have recorded $55.62 billion in cumulative net inflows and held approximately $101.25 billion in net assets, representing about 6.33% of Bitcoin's market capitalization.