Central Bank Louis sparked a mix of entertainment and curiosity from the cryptocurrency community on Tuesday, May 7, after posting a post showing how the cost of eggs in Bitcoin (BTC) has fluctuated over the past 14 months against the US dollar.
On June 6, the central bank published a research arm in a blog post entitled “Buying eggs with bitcoins – looking at currency-related fluctuations in prices.
The FRED blog compares egg prices in US dollars against bitcoins. Check out the post to see which prices are more stable https://t.co/Qfy9w8zgBk image.twitter.com/qpFH4ny33S
– St. Louis Fed (@stlouisfed) June 6, 2022
The entry originally shows a graph showing the historical price of eggs in US dollars for each month since January 2021, stating that the price fluctuated between $ 1.47 and $ 2.52 over a 14-month period.
This is followed by a graph that shows how Bitcoin has behaved over the same period and states that the price has fluctuated “much more than it did for the price of the US dollar.
The report did not say whether the price of eggs had risen or the dollar had fallen, or both, as the cause of the development.
“What would the graph look like if we bought the same box of eggs with bitcoins instead of US dollars?”
It also drew attention to Bitcoin’s transaction fees, which it says can fall between $ 2 and $ 50.
“In addition, you need to add a bitcoin transaction fee, which has been around $ 2 lately, but can rise over $ 50 occasionally. Hopefully, if you were making this purchase with bitcoin, you would put many, many more eggs in your basket, “it wrote.
Crypto Twitter responds
The blog post eventually sparked outrage from the cryptocurrency community on Twitter, with many arguing that the central bank was having a “cherry pick” period to push the story of Bitcoin instability, rather than “zooming out”, which would instead show a sharp devaluation of the US dollar .
The Central Bank wrote a post that showed the prices of eggs in USD and Bitcoin, where they were compared last year and showed Bitcoin as more volatile and unpredictable.
The only problem was that they forgot to zoom out https://t.co/WrCyaI4NP6 image.twitter.com/rJVbedAs2z
– Nick Neuman (,) (@Nneuman) June 6, 2022
A Twitter user who goes by the name @MapleHodl pointed out the obvious with that statement that the USD is steadily declining over time and Bitcoin is volatile in the short term, though rising, so “stack the yolks accordingly.
Other Twitter users said that for the Fed to even recognize Bitcoin as an account entity as a net positive symbol for the king cryptocurrency.
Even the Fed is starting to price consumer goods in BTC. Bullish.
Egg prices fall. No inflation. image.twitter.com/hbeR38PWdx
Joe Burnett (@IIICapital) June 6, 2022
“No matter what they say. They used Bitcoin as a unit of account to compare. It’s very big. “
Connected: Fed money printer goes into reverse: What does that mean for cryptocurrencies?
A recent entry from the Central Bank of St. Louis arrives as a survey by Bloomberg’s MLIV Pulse on June 6 revealed that cryptocurrencies and technology stocks are “seriously sensitive” to the US Federal Reserve’s quantitative easing plans aimed at reducing inflation.
“Historical change is seen as a significant threat to technology stocks and digital tokens – both risk-sensitive assets that expanded into the Covid-era market before the crater hit this year’s asset collapse.
Since 2009, when Bitcoin was first introduced, the US dollar has lost 26% of its value and has been monitoring average inflation of 2.32% per year since then, according to this inflation calculator.
On the other hand, one Bitcoin, which started at $ 0.00 in 2009, is now worth $ 29,495 at the time of writing.
The chart below shows the purchasing power of one US dollar compared to today. In 1913, one US dollar was able to buy 30 Hershey’s pieces of chocolate. By 2020, it can buy only one McDonald’s coffee. In addition, the money supply (M2) in the United States has skyrocketed over the past two decades, from $ 4.6 trillion in 2000 to $ 19.5 trillion in 2021.
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