On Tuesday, May 7, the St. Louis Federal Reserve sparked a mixture of amusement and curiosity in the crypto community after publishing a post showing how the value of eggs in Bitcoin (BTC) has fluctuated over the past 14 months compared to the US dollar.
On June 6, the Fed’s research arm blogged mail titled “Buying Eggs with Bitcoin – A look at currency-related price volatility.”
— St. Louis Fed (@stlouisfed) June 6, 2022
The post initially features a chart showing the historical price of eggs in USD for each month since January 2021, noting that prices have fluctuated between $1.47 and $2.52 over a 14-month period.
This is followed by a chart showing how Bitcoin behaved over the same time period, noting that the price fluctuated “much more than the USD price.”
The report does not indicate whether egg prices have risen or the dollar has depreciated, or both, as reasons for this trend.
“What would the graph look like if we bought the same box of eggs with bitcoin instead of US dollars?”
He also drew attention to bitcoin transaction fees, which she says can range from $2 to $50.
“Also, you will need to add in the bitcoin transaction fee, which has been around $2 lately but can sometimes go over $50. Hopefully, if you were making this purchase with bitcoin, you would put a lot more eggs in your basket,” the post reads.
Crypto Twitter reacts
The blog post ended up drawing the ire of the crypto community on Twitter, with many claiming that the Fed was “cherry picking” on the time period to advance the narrative of Bitcoin’s instability rather than “zooming out,” which would instead show a massive devaluation. US dollar.
The Fed wrote a post showing egg prices in US dollars and bitcoin, comparing them over the past year, showing bitcoin as more volatile and unpredictable.
— Nick Neuman (, ) (@Nneuman) June 6, 2022
Twitter user @MapleHodl pointed out the obvious: statement that the US dollar is constantly depreciating over time, and bitcoin is unstable in the short term, although it is rising, so “stack the yolks accordingly.”
Other Twitter users said that for the Fed, even the recognition of Bitcoin as a unit of account is a net positive sign for the king of cryptocurrencies.
Even the Fed is starting to value consumer goods in BTC. Bullish.
Egg prices are falling. Without inflation. pic.twitter.com/hbeR38PWdx
— Joe Burnett ()³ (@IIICapital) June 6, 2022
“Whatever they say. They used bitcoin as the unit of account for comparison. It’s really a lot.”
The Fed’s Money Printer Goes Reverse: What Does This Mean for Cryptocurrency?
The recent post by the Federal Reserve Bank of St. Louis comes after a June 6 Bloomberg MLIV Pulse poll showed that crypto and technology stocks are “highly vulnerable” to the U.S. central bank’s quantitative tightening plans aimed at curbing inflation.
“The historical shift is seen as a notable threat to tech stocks and digital tokens — both risk-sensitive assets that skyrocketed during the market mania of the Covid era before collapsing in a cross-asset crash this year.”
According to this report, since 2009, when Bitcoin first appeared, the US dollar has lost 26% of its value, tracking an average inflation rate of 2.32% per year since then. inflation calculator.
On the other hand, one bitcoin, which was worth $0.00 in 2009, is worth $29,495 at the time of writing.
The chart below shows the purchasing power of one US dollar in today’s terms. In 1913, one US dollar could buy 30 Hershey’s chocolate bars. In 2020, you can only buy one McDonald’s coffee. In addition, the money supply (M2) in the US has grown dramatically over the past two decades, rising from $4.6 trillion in 2000 to $19.5 trillion in 2021.
Credit : cointelegraph.com