Bitcoin has been touted as a hedge against inflation, and according to the Federal Reserve, it is proving to be a better store of value than the U.S. dollar. In a blog post released by the St. Louis Fed, the author compares the price of eggs in Bitcoin and USD, and the results are surprising.
The author measures the price of a dozen eggs in Bitcoin, measured in satoshis, and USD since January 2021. The post concludes that the price of eggs in BTC fluctuates more than it does in USD. Additionally, there is the added cost of Bitcoin transaction fees, which can sometimes be as high as $50. However, the charts included in the post show that since December 2022, the number of satoshis required to purchase a dozen eggs has decreased more than the equivalent USD.
As of August 2023, BTC holders require 70% fewer satoshis for the purchase, while USD requires 58% less. However, when compared to the start of 2021, the cost of eggs is higher for both currencies. BTC has experienced a 73% increase, while USD has seen a 39% increase. It’s important to note that this timeframe comparison may not provide an accurate reflection of Bitcoin’s performance.
To gain a deeper understanding of Bitcoin’s performance, a longer-term synopsis is necessary. When compared to Bitcoin’s last pre-halving year in 2019, the price of eggs is significantly lower. The “eggflation” observed in 2023 is only a blip in the overall landscape. On the other hand, the price of eggs in USD has consistently increased over time.
In addition to Bitcoin’s performance, the blog post highlights warning signs in the U.S. economy. Attention is focusing on the U.S. dollar as the U.S. dollar index reaches near one-year highs. Analysts suggest that actions by foreign states may seek to redress the imbalance as their currencies suffer. Furthermore, the possibility of a recession in 2024 is becoming increasingly likely, with the Fed’s own data indicating a near 60% chance.
It is important to note that this article does not provide investment advice or recommendations. Every investment and trading move carries risk, and readers should conduct their own research before making any decisions.