The U.S. Federal Reserve published a blog pricing eggs with Bitcoin (CRYPTO: BTC) to demonstrate the 14-month volatility of the leading digital asset against the U.S. dollar. However, the crypto community was quick to poke holes in the Fed’s assumptions and the manner in which it presented the data.
What Happened: In a blog post on Monday, the St. Louis Fed shared a graph of eggs priced in satoshis — the smallest subunit of Bitcoin — to show the price volatility associated with the digital currency.
The FRED Blog compares egg prices in U.S. 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
When measured in dollars, the Fed’s analysis shows the price of a dozen eggs varied between $1.47 and $2.52 since January 2021. When measured in units of BTC, the Fed observed that the price fluctuates “much more than it did for the U.S. dollar price.”
Bitcoiners were quick to point out several perceived flaws with the Fed’s argument.
“High time preference fiaters draw bold conclusions from short term data, failing to see the long term picture,” Saifdeen Ammous, the author of The Bitcoin Standard, wrote on Twitter.
High time preference fiaters draw bold conclusions from short term data, failing to see the long term picture https://t.co/HOGAUJ8ExJ pic.twitter.com/m6JSXDymYH
— Saifedean.com (@saifedean) June 6, 2022
one point of contention here. half of all bitcoin TXs this year cost $0.53 or less in fees. not “$2 lately.” the mean is skewed higher by extremely high time preference, high value transactions. pic.twitter.com/qLQtlaR8OY
— Alex Thorn (@intangiblecoins) June 7, 2022
Alex Thorn, head of research at Galaxy Digital, said that an inaccurate assumption regarding BTC transaction fees likely resulted in a skewed mean.
The Fed’s report also did not specify whether an increase in the price of eggs or a decrease in the price of the dollar affected the results in the graph presented.
According to an independent analysis from Twitter user Anthony Bardaro, however, eggs priced in Bitcoin were still more volatile overall than eggs priced in U.S. dollars.
...I think what you meant to say was:
— Anthony Bardaro (@AnthPB) June 7, 2022
'comparing eggs priced in both dollars and bitcoin, $btc was more volatile, unpredictable, and deflationary'
...to which you should add:
'the price of eggs vs many other assets was much less volatile and much more deflationary than $btc'
Price Action: According to data from Benzinga Pro, the leading cryptocurrency Bitcoin (CRYPTO: BTC) was trading at $29,620, down 5% over the last 24 hours, at the time of writing.
