Bitcoin is still beating the US dollar with ‘eggflation’ – Fed data

Bitcoin (BTC) is beating inflation better than the US dollar, the US Federal Reserve says – but inadvertently.

In a blog post first published in June 2022 and since updated, the St. Louis Fed compares buying eggs in BTC versus the dollar – still with surprising results.

Bitcoin vs. US dollar: “Eggflation” went nowhere

Bitcoin hosts have far better things to do with their BTC holdings than buying eggs, but that's the topic of a Fed blog post that attempts to demonstrate Bitcoin's unrivaled purchasing power against the dollar.

To do this, the anonymous author measured the price of a dozen eggs in BTC and USD as of January 2021.

“The price fluctuates a bit between 2829 and 6086. [satoshis]This is much higher than the value of the US dollar,” the article concluded.

“Additionally, you need to add bitcoin transaction fees, which have been around $2 lately, but can occasionally rise above $50. Hopefully, if you were making this purchase with Bitcoin, you would have put a lot more eggs in your basket.

But after the charts peaked in December 2022 for both currencies, the number of satoshis needed to buy the same dozen eggs fell against the US dollar.

BTC holders will need 70% less sat for the purchase from August 2023, the latest month for which Fed data is available, than 58% less dollars.

Compared to the beginning of 2021, the egg value is higher for both currencies – 39% versus 73% for USD and BTC, respectively. Here, however, arbitrary time frame comparisons remain less than useful.

At the time, BTC/USD was trading roughly the same as it is now, with the US Consumer Price Index (CPI) increasing year-over-year to the Fed's 2 percent target. With the latter now a thing of the past, only a long-term summary provides a true understanding of Bitcoin's performance.

The price of eggs In 2019, Bitcoin is worth less than it was during the previous half year. The “egg inflation” of 2023 is a blip on the landscape.

In dollar terms, the picture is one of strong price increases – the average in mid-2019, for example, was over $1.20 per dozen, or 40% less than now.

The recession is huge.

As Cointelegraph reports, attention is turning to the greenback this month as the U.S. dollar index bubbles closer to a year.

Related: Bitcoin Expects Bull Market As US Faces ‘Bear Steepener' – Arthur Hayes

Analysts suggest that measures by foreign countries may seek to rebalance as their currencies suffer, but under the hood, the US economy is showing warning signs.

In the year A recession in 2024 is becoming more and more likely, with even the Fed data in September putting the probability close to 60%, while bond yields have risen in line with the so-called “bear exit”.

This article does not contain investment advice or recommendations. Every investment and business activity involves risk, and readers should do their own research when making a decision.