Why Bitcoin Keeps Going Up (And the Dollar Keeps Slipping)

OpinionEducation
Written By Adam Poulton

If you’ve ever wondered how bitcoin gets its price — especially when priced in Aussie dollars — the answer is actually pretty simple. And the chart below tells the story better than anything.


Your chart shows two lines over time:

  • The blue line (M3 AUD supply) drifting gently down — not because there’s less money, but because each dollar is slowly losing purchasing power as more dollars are created.

  • The red line (BTC price) climbing up — because adoption keeps increasing while supply stays fixed.

Red line - Increasing bitcoin adoption therefore more value per bitcoin.

Blue line - Increasing money supply therefore less value per dollar.

Combined, give you a higher CAGR of 30% - 50% pa (depending on calculation period)


Let’s unpack why.

1. More Dollars in Circulation = Each Dollar Buys Less

Australia’s money supply (M3) grows by roughly 10% per year. That means every year there are more dollars chasing the same amount of goods, services… and yes, bitcoin.

If bitcoin’s supply is fixed but the number of dollars keeps growing, then purely from currency debasement alone, BTC should rise roughly in line with that growth.

That slow downward slide of the blue line in the chart?
That’s the dollar quietly losing value.

2. Bitcoin Adoption = Extra Upward Pressure

Then layer on the second force: adoption.

Every time someone chooses bitcoin for:

  • saving

  • remittances

  • business payments

  • building apps

  • trading or holding

…they reduce the available supply and increase demand.

Unlike the dollar, bitcoin doesn’t inflate.
Unlike the dollar, bitcoin’s utility is growing.

That’s what you’re seeing in the rising red line of the chart:
A fixed-supply asset meeting growing global demand.

Putting It Together

So when you price bitcoin in AUD, the formula is basically:

BTC price = AUD debasement + Bitcoin adoption

Your chart captures both forces beautifully — the dollar drifting downward in real value, and bitcoin steadily climbing as more people use it.

Short, simple, and exactly why bitcoin keeps appreciating over the long run.

Adam Poulton
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