Bitcoin (btc) is beating inflation better than the US dollar, the Federal Reserve says, unintentionally.
in a blog entry First published in June 2022 and updated since then, the St. Louis Fed compares buying eggs with BTC versus the USD, still with surprising results.
Bitcoin against the US dollar: "eggflation" has gone nowhere
Bitcoin hodlers arguably have much better use cases for their BTC holdings than buying eggs, but that's the topic of a dedicated Fed blog post that attempts to demonstrate Bitcoin's non-competitive purchasing power against the dollar.
To do this, its anonymous author measured the price of a dozen eggs in BTC, measured in satoshis, and USD since January 2021.
"The price fluctuates quite a bit, between 2829 and 6086, which is much more than the price in US dollars," the post concludes.
“In addition, a bitcoin transaction fee would have to be added, which lately has been about $2, but can sometimes exceed $50. Hopefully, if you made this purchase with bitcoin, you would put a lot more eggs in your basket.”
However, the included charts show that since peaking in both currencies in December 2022, the number of sats needed to buy the same dozen eggs has fallen more than the dollar equivalent.
BTC hodlers require 70% less for purchases starting in August 2023, the last month for which Fed data is available, versus 58% less dollars.
Compared to the beginning of 2021, the cost of eggs is higher for both currencies: 39% versus 73% for USD and BTC, respectively. Here, however, the arbitrary temporal comparison remains less than useful.
At the time, BTC/USD was trading at virtually the same levels as today, while the year-over-year increase in the US Consumer Price Index (CPI) was below the Federal Reserve's 2% target. . Now that the latter is a thing of the past, only a longer-term synopsis provides a real view of Bitcoin's performance.
The price of eggs is a fraction of what it was during the last year leading up to the Bitcoin halving in 2019. The "eggflation" seen in 2023 is a comparative blip on the landscape.
In dollar terms, the picture is one of solid price increases: the average in mid-2019, for example, was just over $1.20 a dozen, or 40% less than now.
Recession is coming
Like Cointelegraph reportedThe focus is on the dollar this month as the US Dollar Index (DXY) hits near one-year highs.
Related: Bitcoin bull market awaits as US faces 'steep bearish' - Arthur Hayes
The actions of foreign states may seek to correct the imbalance as their currencies suffer, analysts suggest, while, in the background, the US economy is showing warning signs.
Recession in 2024 is increasingly likely, and even the The Federal Reserve's own data putting the odds at around 60% in September, while bond yields soar in an attack of what is known as a “bearish steepening.”
This article does not contain investment advice or recommendations. Every investment and trading move involves risks, and readers should conduct their own research when making a decision.
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