Are you interpreting the PricedinBitcoin21 index correctly? I don't think the index going up 3X this year really means what you've thought it meant.
I suspect that 'denominated' doesn't mean what you think it means.
It's bad for bitcoins for the index to go up 3X. It's like the CPI gone up 3X. You want the index to go down if you're holding bitcoins.
From your previous comments it seems you believe your net worth has gone up because of this index going up. This index going up has the opposite effect on your bitcoin based net worth. I hope I'm mistaken.
I suspect you asked your initial question incorrectly and wanted to know if my dollar denominated crypto holdings have increased or decreased in value. They have obviously decreased when measured in dollars.
When it comes to value, there is no objective measuring stick. There is no SI standard of measure for value. Every way to measure value is subjective and must be compared relative to other measures. You can measure your net worth by the measuring stick of dollars, euros, Venezuelan bolívars, oil, gold, bitcoin, cartons of eggs, or McDonalds big macs. The Big Mac index is a popular example of this, https://en.wikipedia.org/wiki/Big_Mac_Index
When you ask what my "bitcoin denominated net worth" has done, what you asking is what my net worth number has done when measured in terms of bitcoin rather than in terms of dollars. In this value measurement context, if all of my net worth was directly in bitcoin, there would be zero change, just like if all of my net worth was directly in dollars there would never be any change to my dollar denominated net worth.
My bitcoin denominated net worth has gone up a lot this year. Most of my other money is in the S&P 500, which has almost tripled in value this year. https://www.pricedinbitcoin21.com/chart/index/GSPC.INDX
Unfortunately, the cost of goods and services denominated in bitcoin has also gone up a lot this year. The money supply is only one side of the equation when it comes to the price of goods and services.