Fed Prices Eggs in Bitcoin but Misses the Big Picture: Crypto Community Reacts
The St. Louis Federal Reserve published a blog post with the ratio of eggs to Bitcoin in a bid to criticize the volatility in the latter but ended up being ridiculed for the example.
Cracking Bitcoin-Volatility Case
According to the post “Buying eggs with bitcoins – a look at currency-related price volatility,” the Eggs/BTC graph, the FRED graph, essentially compares egg prices in USD versus bitcoins.
Initially, the Fed research arm showed the price of eggs in USD for every month since January 2021. The price oscillated between $1.47 and a high of $2.52. Next, it multiplied the price by 100 million to reflect it in satoshis, the smallest subunit of Bitcoin. It observed that the price fluctuation was between 2,829 and 6,086 over the same period of 14 months.
The bottom line is that they wanted to show Bitcoin as more volatile and unpredictable when compared to the US Dollar. The Feds also cheekily wrote about the transaction fee and went on to add,
“Plus, you’d need to add a bitcoin transaction fee, which has been about $2 lately, but which can spike above $50 on occasion. Hopefully, if you were making this purchase with bitcoin, you’d put many many more eggs in your basket.”
Crypto Community Lash Out
The crypto community does not hold back. While some called out Fed’s “toxic fiat maximalism,” others were keen on pointing out flaws and the entity’s inability to zoom out and completely missing out on the subsequent devaluation of the USD. Author of “The Bitcoin Standard,” Saifedean Ammous, also called out the Feds for failing to the see the long-term picture and tweeted,
“High time preference fiaters draw bold conclusions from short term data, failing to see the long term picture.”
Others looked at it as a bullish signal that even Fed is pricing certain consumer goods in BTC. Economist and Bitcoin investor Tuur Deemester admitted that the Eggs/BTC graph was created to diss bitcoin’s volatility but also said that it did manage “to add another notch in the credibility belt of hard digital cash.”
