In an unexpected comparison, Bitcoin has been found to beat the US dollar in terms of ‘eggflation’, according to data from the Federal Reserve. This means that the digital currency balances the rising cost of eggs more efficiently than the traditional currency. The St. Louis Fed evaluated making egg purchases with Bitcoin versus the US dollar. Despite being a peculiar choice for buying eggs, Bitcoin has shown some surprising results.
Bitcoin holders, or hodlers, are thought to have more advantageous uses for their Bitcoin than purchasing eggs. Nevertheless, this particular study has revealed that Bitcoin’s buying power, in this context, is noteworthy. The cost of a dozen eggs was measured in both Bitcoin and US dollars since January 2021. Bitcoin has exhibited considerable fluctuation in the price of eggs, with an increase in the Bitcoin transaction fee also stated.
Interestingly, a peak in the price of eggs was seen in both currencies in December 2022. However, since that time, the requirement in satoshis (the smallest unit of Bitcoin) to purchase a dozen eggs had decreased more than it had in USD. The data showed Bitcoin hodlers had to spend 70% fewer satoshis for egg purchases compared to 58% fewer USD as of August 2023.
Comparatively, the cost of eggs increased 73% higher for Bitcoin since the start of 2021, whereas it rose 39% in terms of US dollars within the same time frame. Now, the vital question arises – how accurate is it to draw conclusions based on an arbitrary timeframe? It suggests that a longer-term comparison is required for truly understanding Bitcoin’s performance.
The bigger picture on eggflation indicates that egg prices in dollar terms have noticeably increased. In sharp contrast, the cost of eggs in Bitcoin has diminished since its last pre-halving year, 2019. Eggflation is seen as a relatively small concern in the wider context of Bitcoin’s economic landscape.
This investigation proves timely as the US dollar index approaches a near one-year high, focusing global attention. Observations on the US economy signal that a recession could be on the horizon as early as 2024, with the chances nearing 60% according to Federal Reserve data. Amid these forecasts, would it be too cautious to be skeptical about the resilience of cryptocurrencies like Bitcoin?
Source: Cointelegraph
