There's a colony of cats that eats at the same bowl near my place. Seven of them, shoulder to shoulder, same food, same minute. If you asked each of them how the meal went, you'd get seven different answers — because one of them was at the deep end of the bowl, one got there late, one had already eaten, and one spent the whole time watching the others instead of eating.
Same bowl. Same food. Different meal, depending on where you were standing.
Bitcoin's price is like that, and almost nobody accounts for it. The number you read in the headline is measured from a specific place. You are, almost certainly, not standing there.
1. The headline is a dollar number
When a site says bitcoin is up 40% this year, it means in US dollars. That's the convention, the deepest market, the pair nearly all volume trades against.
But bitcoin doesn't have one price. It has a price in every currency, and those prices move for two separate reasons:
- Bitcoin moved against the dollar.
- Your currency moved against the dollar.
Your actual return is both of those stacked on top of each other. If you hold euros, zloty, reais, rand, lira, or pounds, the headline is a number from someone else's vantage point.
A worked example with round numbers, because this is easier to see than to describe. Suppose over a year:
- Bitcoin rises 20% in dollars.
- Your currency strengthens 10% against the dollar.
Your return isn't 20%. It's roughly 20% minus 10%, so about 9% once you compound it properly. A third of the gain evaporated and bitcoin had nothing to do with it.
Now flip it. Your currency weakens 10% against the dollar. Your return is roughly 33%. You just outperformed the headline by a third, and again, bitcoin had nothing to do with it.
Same asset. Same year. A 24-point spread in outcomes, purely from where you were standing.
2. This is why people from different countries have incomprehensible arguments
You've seen this thread. Someone says bitcoin has been dead money for two years. Someone else says it's the only thing that saved them. Both are being completely honest.
If your currency has been stable or strengthening against the dollar, bitcoin's flat periods feel genuinely flat and its drawdowns feel brutal. If your currency has been losing ground steadily, the same chart looks like an escape hatch.
Neither person is lying or innumerate. They are reporting the view from their own position at the bowl. The disagreement isn't about bitcoin — it's about the denominator, and nobody mentions the denominator because to each of them it's invisible. It's just "money".
The practical upshot: be careful whose performance stories you absorb. A strategy that worked beautifully for someone in a weakening currency may work much less well for you, and the reason has nothing to do with their skill or their timing.
3. What this changes about how you buy
Your averaging is denominated too. If you buy a fixed amount of your local currency every week, you're not buying a fixed amount of dollars. When your currency weakens, your fixed local amount buys fewer dollars of bitcoin — you're automatically buying less at exactly the moment the local price has risen. That's not a bug. It's roughly the behaviour you'd want. But it means your average cost in local terms drifts in ways the dollar chart won't explain.
Your "I'm down" feeling may be a currency feeling. Before you conclude a position is underwater, check whether the move is in bitcoin or in your currency. These require completely different responses, and treating a currency move as a bitcoin move is how people sell perfectly fine positions at bad moments.
Your tax computation almost certainly uses local currency. In most jurisdictions, gains are calculated in your home currency, using the rate at the time of each transaction. This means you can owe tax on a gain you never experienced in dollar terms — or owe nothing on one you did. If you only ever track dollars, your records will not match what your tax authority wants. Fix this early; reconstructing exchange rates for three years of transactions is a miserable weekend.
Stablecoins don't solve it, they relocate it. Holding USDT or USDC means you've taken a dollar position. That's a choice, not a neutral resting state. If your life, rent and groceries are in another currency, parking in dollars is an active bet that may be right or wrong.
4. The uncomfortable half
I've just explained why the headline number might understate your return. Let me be straight about the other direction, because the framing above is the one that gets abused.
"Measured in my currency it's up more" is the favourite consolation of someone in a bad position. The currency effect is real and symmetric — it helps you and hurts you with equal indifference. Picking the denominator that flatters you is not analysis, it's therapy. If you only mention the currency effect when it's working for you, you've stopped measuring anything.
A weakening currency is not good news. If bitcoin is up 60% in your currency because your currency fell apart, your purchasing power over actual goods may be flat or worse. Your rent went up. Your food went up. The chart looks magnificent and your life got harder. Celebrating that number is confusing the thermometer with the weather.
And the real benchmark is harder than any of this. Neither dollars nor your local currency is a fixed measuring stick — both lose purchasing power over time, at rates that differ from the official figures and differ again depending on what you personally buy. The honest version of "how did I do" is measured in things: rent, food, a flight home, years of freedom. That's unglamorous and nobody charts it, which is precisely why it's the version worth asking.
None of this is a reason to ignore the dollar price. It's the common language and it's genuinely useful. Just know you're translating.
Seven cats, one bowl, seven different meals. Before you ask how you're doing, check which end of the bowl you're measuring from. 🐾⚡
