New Tools To Measure Prices In Bitcoin
The below is a direct excerpt of Marty’s Bent Issue #1222: “The Fed is officially scared of bitcoin (or quietly trying to endorse it)” Sign up for the newsletter here.
The comedians over at the St. Louis Federal Reserve dropped a blog post earlier today that compared the fluctuation of eggs prices in U.S. dollars and sats from the beginning of 2021 through April 2022. It seems like an attempt to dunk on bitcoin, but if you look closely at the charts you’ll see that the overall inflation rate of eggs over the cherry-picked timeframe is lower in sats (44.3%) than it is in dollars (71.9%). Although bitcoin’s price fluctuated more quickly over the timeframe, the Fed will cherry-pick data. We here at TFTC will also do this to show why this isn’t the most accurate representation.
If the Fed was more honest and got out of the way of short-termism, they would share the information they shared above but zoom in a bit (as possible on the page of the attempted dunk). This will give their readers a better picture of the deflationary tendencies that bitcoin has over longer periods of times and compare it with the U.S. Dollar. We will share this information with you today because they refused to do so in their blog post.
As you can see by zooming out, the price of eggs as measured in sats fell by — *checks notes– 99.3% since January 2015 (when the Fed started tracking bitcoin data), while rising by 19.2% in U.S. dollars. Sure there was some volatility along the way, but over the course of 76 months an individual’s purchasing power increased significantly if they were holding bitcoin. To visualize this increase in purchasing power another way, here’s what it would look like if an individual were to take $100 per paycheck since the beginning of 2015 to save in bitcoin.
Talk about superior savings technology! And for those of you skeptics out there seething because bitcoin was trading at $250 near that cycle’s bear market lows on January 1st, 2015, here’s what it would look like if you began saving $100 worth of sats per paycheck beginning at the bull market top of late 2017.
Still a very impressive display from the superior savings technology.
It’s a bit strange that academics at the St. Louis Fed Office would try to score dunking points for bitcoin in this manner. It could be a subtle endorsement of the next reserve currency in the world. It’s a subtle signal that people should consider bitcoin as their monetary option. Is the St. Louis Fed acting as a fifth-column actor to try to undermine the dollar’s standing from within? Your Uncle Marty would not be surprised at this point. It would be admirable if that were the case.