Bitcoin Outpaces US Dollar Amidst ‘Eggflation’, According to Federal Reserve Data

Bitcoin appears to be outperforming the US dollar in the face of inflation, according to data from the US Federal Reserve, albeit in an unexpected context.

In a blog post released by the St. Louis Fed in June 2022 and subsequently updated, the comparison between purchasing eggs with Bitcoin and dollars was explored, yielding some surprising results.

The anonymous author of the post tracked the price of a dozen eggs in both BTC and US dollars since January 2021. The conclusion was unexpected: the price of eggs in Bitcoin fluctuated significantly more than it did in US dollars, ranging between 2829 and 6086 satoshis, the smallest unit of Bitcoin. Additionally, Bitcoin transactions carried fees, sometimes spiking above $50, making the comparison more complex.

However, the data charts revealed an interesting trend. Since reaching a peak in December 2022, the number of satoshis required to purchase a dozen eggs has decreased more than the equivalent in US dollars. As of August 2023, Bitcoin holders needed 70% fewer satoshis for the purchase compared to 58% fewer US dollars.

Comparing the egg costs from the start of 2021, prices were higher for both currencies, with a 39% increase for US dollars and a 73% increase for BTC. This short-term comparison, however, does not provide substantial insights due to its arbitrary nature. For a more meaningful analysis, a longer-term perspective is necessary to truly gauge Bitcoin’s performance.

Interestingly, the price of eggs in 2023 remains significantly lower than during Bitcoin’s last pre-halving year in 2019. The term “eggflation,” referring to the increase in egg prices, appears to be a minor blip in the overall economic landscape.

In terms of the US dollar, prices have seen solid increases over the years. For example, the average price in mid-2019 was barely above $1.20 per dozen, representing a 40% increase from then to the present.

While Bitcoin’s comparative resilience is noteworthy, attention is currently shifting toward the US dollar, with the US Dollar Index reaching near one-year highs. Analysts speculate that actions by foreign states might attempt to correct currency imbalances as their own currencies face challenges. Simultaneously, signs of economic warning, including an increasing likelihood of a recession in 2024, are becoming more apparent. According to Fed data, the odds of a recession in September were near 60%, coupled with a surge in bond yields, a phenomenon known as “bear steepening.” These indicators highlight the complex and evolving economic landscape, where Bitcoin’s resilience offers a unique perspective amid these uncertainties.

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