US Dollar's Purchasing Power Plummets 97% Since 1913

The US dollar has lost approximately 97% of its purchasing power since the Federal Reserve was created in 1913, according to the Bureau of Labor Statistics' Consumer Price Index for All Urban Consumers (CPI-U). This staggering figure reflects the official price index compounded over 113 years, through two world wars, the Great Inflation of the 1970s, and the 2021-23 spike.

As a result, a $3 item in 1913 would cost around $100 today. This decline in purchasing power is not a slogan, but a reflection of the dollar's steady devaluation over time. The 1971 end of gold convertibility accelerated this trend, and cash left idle was quietly taxed by inflation throughout the period.

Bitcoin's Design as a Store of Value

Bitcoin, designed in response to the existing monetary system, features a 21 million-coin cap paired with a declining issuance schedule. Although it did not exist in 1913, its record as a store of value since 2009 has been marked by extreme fluctuations.

Early buyers of Bitcoin saw their purchasing power increase exponentially, while later buyers endured significant drawdowns of 50% to 80% within single cycles. As of early September 2026, Bitcoin trades near $79,852, well below its October 2025 peak of $126,080.

Bitcoin's Price Performance and Utility

Since its inception, Bitcoin's price has soared more than 59,000%, and over full market cycles, it has outperformed cash and often beaten gold. However, inside any single cycle, it can erase years of gains within months – a trade-off inherent to a scarce, non-yielding, narrative-driven asset.

Utility has reshaped Bitcoin's role since then, with the approval of spot Bitcoin ETFs in the United States in 2024. These products have turned a bearer asset into a ticker that pensions, Registered Investment Advisors (RIAs), and balance-sheet allocators can hold without managing private keys.

As of September 4, 2026, spot Bitcoin ETFs have accumulated $55.62 billion in cumulative net inflows, with total net assets across the category reaching $101.25 billion, equal to roughly 6.33% of Bitcoin's entire market cap.

Adoption and Challenges Ahead

Adoption remains incomplete in several respects. Volatility remains high, regulation varies widely across jurisdictions, and energy and custody risks are real and unresolved. The US dollar still clears most global trade, prices most debts, and pays most wages worldwide.

Bitcoin has not replaced the dollar's role as a unit of account, but it has offered savers an exit from a currency that official statistics say lost 97% of its purchasing power since 1913. Whether this exit functions as a genuine reserve asset, pure speculation, or some combination of both depends heavily on the investor's time horizon.

Conclusion

The US dollar's purchasing power has plummeted 97% since 1913, making it a less attractive store of value. Bitcoin, designed as a response to this system, has offered savers an exit, but its adoption remains incomplete due to volatility, regulatory uncertainty, and energy and custody risks.

As investors consider Bitcoin as a potential store of value, they must weigh its potential for long-term gains against its short-term volatility and the risks associated with its adoption.

  • Bitcoin's price has soared more than 59,000% since its inception.
  • Spot Bitcoin ETFs have accumulated $55.62 billion in cumulative net inflows.
  • Bitcoin's total net assets across the category reach $101.25 billion, equal to roughly 6.33% of Bitcoin's entire market cap.