The St. Louis Federal Reserve sparked a mix of amusement and curiosity from the cryptocurrency community on Tuesday, May 7, after publishing a post showing how the cost of eggs in bitcoin (BTC) has fluctuated over the past 14 months. compared to the US dollar.
On June 6, The Fed’s research division published a blog post titled “Buying Eggs with Bitcoin: A Look at Currency-Related Price Volatility.”
The FRED Blog compares egg prices in US dollars vs. bitcoins. Check out the post to see which prices are more stable https://t.co/Qfy9w8zgBk pic.twitter.com/qpFH4ny33S
— St. Louis Fed (@stlouisfed) June 6, 2022
The FRED Blog compares egg prices in US dollars and in bitcoins. Check the post to see which prices are more stable
The post initially features a graph showing the historical price of eggs in US dollars for each month since January 2021, noting that prices fluctuated between $1.47 and $2.52 over the 14-month period.
Next, He follows up with a chart showing how bitcoin has performed over the same time period, noting that the price fluctuated “much more than the price of the US dollar.”
The report does not stipulate whether the price of eggs has increased or the dollar has devalued, or both, as causes of the trend.
“What would the graph look like if we bought that same carton of eggs with bitcoins instead of US dollars?”
He also drew attention to bitcoin transaction fees, which he says can range from $2 to $50.
“Also, you would have to add a bitcoin transaction fee, which has been about $2 lately, but can be over $50 at times.. Hopefully, if you were to make this purchase with bitcoin, you would put a lot more eggs in your basket,” she wrote.
The Twitter crypto community reacts
The blog post ended up drawing the ire of the cryptocurrency community on Twitter, and Many argued that the Fed was “picking” the timeframe to push the narrative of bitcoin instability, rather than “picking a longer time frame,” which would show massive devaluation of the US dollar.
The Fed wrote a post showing the price of eggs in USD and Bitcoin, comparing them over the last year, showing Bitcoin as more volatile and unpredictable.
Only problem was they forgot to zoom outhttps://t.co/WrCyaI4NP6 pic.twitter.com/rJVbedAs2z
— Nick Neuman (, ) (@Nneuman) June 6, 2022
The Fed wrote a post showing the price of eggs in USD and Bitcoin, comparing them in the last year, showing bitcoin as more volatile and unpredictable. The only problem was that they forgot to zoom out.
A Twitter user who responds to the name of @MapleHodl pointed out the obvious by say that the dollar continually depreciates over time and bitcoin is volatile in the short term, although it appreciates, so you should “buy eggs accordingly.”
Other Twitter users said that the fact that the Fed even recognizes bitcoin as a unit of account is a net positive sign for cryptocurrencies.
Even the Fed is starting to price consumer goods in BTC. Bullish.
Price of eggs going down. No inflation. pic.twitter.com/hbeR38PWdx
— Joe Burnett ()³ (@IIICapital) June 6, 2022
Even the Fed is starting to price consumer goods in BTC. I am bullish.
The price of eggs is going down. There is no inflation.
“It doesn’t matter how you put it. They used bitcoin as the unit of account to compare. That is really big.”
The recent release from the Federal Reserve Bank of St. Louis comes as a June 6 Bloomberg Pulse MLIV survey revealed that Tech and crypto stocks are “highly vulnerable” to the US central bank’s quantitative tightening plans, which are aimed at dampening inflation.
“The landmark reversal is seen as a notable threat to tech stocks and digital tokens, both risk-sensitive assets that soared in the market mania due to Covid before collapsing in this year’s cross-asset slump.”
Since 2009, when bitcoin came into existence, the US dollar has lost 26% of its value, following an average inflation rate of 2.32% per year since then, according to this inflation calculator.
On the other hand, one bitcoin, which started out worth $0.00 in 2009, is now worth $29,495. at the time of writing this article.
The chart below shows the purchasing power of a US dollar in current terms. In 1913, one US dollar could buy 30 Hershey’s chocolate bars. In 2020, you can buy only one coffee from McDonald’s. Also, The money supply (M2) in the United States has skyrocketed in the last two decades, going from 4.6 trillion in 2000 to 19.5 trillion in 2021.
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