Federal Reserve St. Louis published a blog post with the egg to Bitcoin ratio in an attempt to criticize the volatility in Bitcoin, but ended up being ridiculed as an example.
Solving the Bitcoin Volatility Case
According to post “Buying eggs with bitcoin – look at currency-related price volatility,” the Eggs/BTC chart, the FRED chart, essentially compares egg prices in USD versus bitcoin.
Initially, the Fed research group showed egg prices in USD for each month since January 2021. The price oscillated between $1.47 and a high of $2.52. Next, he multiplied the price by 100 million to reflect it in satoshi, the smallest subunit of Bitcoin. It was observed that the price fluctuated between 2,829 and 6,086 during the same period of 14 months.
The bottom line is that they want to show Bitcoin as more volatile and unpredictable when compared to the US Dollar. The Fed also cheekily wrote about transaction fees and added,
“Plus, you need to add the bitcoin transaction fees, which are currently around $2, but can sometimes spike above $50. Hopefully, if you make this purchase with bitcoin, you will put more eggs in your basket.”
Crypto Community Against
The crypto community is not holding back. While some called the Fed’s “toxic fiat maximalism”, others were interested in pointing out the entity’s shortcomings and inability to zoom out and actually lose the next USD devaluation. The author of “The Bitcoin Standard,” Saifedean Ammous, also called out the Feds for failing to see the long-term picture and tweeted,
“High time preference fiaters draw bold conclusions from short-term data, failing to see the longer-term picture.”
Others see it as a bullish signal that even the Fed price certain consumer goods in BTC. Bitcoin economist and investor Tuur Deemester admits that the Eggs/BTC chart was created to distinguish bitcoin volatility but also said that it succeeded in “adding another notch in the hard money digital credibility belt.”
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