The St. Louis Fed has compared Bitcoin (BTC) to the US Dollar in terms of inflation, and the results are unexpected. In a blog post first published in June 2022 and subsequently updated, the Fed found that buying eggs with BTC was more effective in beating inflation than using the US Dollar.
The crypto economy has been an interesting topic lately, with crypto blogs such as Cointelegraph covering the latest crypto crisis and the Fed’s meetings. Web 1.0, Web 2.0 and Web 3.0 have also been talked about in the metaverse, with debates about the differences between Web 2.0 and Web 3.0.
Bitcoin vs. U.S. dollar: “Eggflation” has gone nowhere
Instead of using their Bitcoin (BTC) holdings to buy eggs, hodlers may have better use cases. The topic of the crypto fed blog post was to show Bitcoin’s lack of competitive power versus the dollar.
It was measured the price of a dozen eggs in BTC and U.S. dollars since January 2021. It was concluded that the price fluctuates quite a bit, between 2829 and 6086 satoshis, more than the U.S. dollar price.
The charts show that since reaching a peak in December 2022, the amount of satoshis needed to purchase the same dozen eggs has decreased more than the equivalent in U.S. dollars.
As of August 2023, the latest month for which Fed data is available, BTC hodlers require 70% fewer sats for the purchase, compared to 58% fewer dollars.
It is higher for both currencies compared to the start of 2021, 39% for U.S. dollars and 73% for BTC. However, the timeframe comparison is not helpful since BTC/USD traded at practically the same levels as at present, while the U.S. Consumer Price Index (CPI) year-on-year increase was under the Fed’s own 2% target.
The price of eggs is a fraction of what it was during Bitcoin’s last pre-halving year in 2019. The “Eggflation” seen in 2023 is a comparative blip on the landscape.
In dollar terms, the picture is one of solid price increases — the average in mid-2019, for example, was barely above $1.20 per dozen, or 40% less than now.
It is clear that the crypto crisis and web 2.0 vs web 3.0 comparison have no impact on the crypto economy.
Recession looms large
As Cointelegraph reported, the crypto economy is focusing on the greenback in September as the U.S. Dollar Index rises to near one-year highs.
Foreign states may take action to address the imbalance as their currencies struggle, according to analysts, while the U.S. economy is exhibiting signs of distress.
The crypto crisis latest data from the Fed points to a recession in 2024 becoming more likely, with the odds of it happening standing at around 60%. Bond yields are also spiking, a phenomenon known as “bear steepening”.
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