Bitcoin
Egg On Face: St. Louis Fed Uses Bitcoin As Unit Of Account
The St. Louis Federal Reserve has posted a new blog where it compares the price of eggs in USD versus Bitcoin. Although the blog is designed to crack a joke about the cryptocurrency, the Fed ultimately has ended up with egg on its face. Here’s why.
FRED Blog Cracks Joke On Bitcoin Using Egg Price Inflation
FRED stands for Federal Reserve Economic Data. It is essentially a database of all kinds of important economic information.
The FRED blog puts a spotlight on some kind of currently hot topic. In past weeks, it looked at rising mortgage rates and income equality. This week’s topic, however, took a crack at Bitcoin by comparing its volatility to USD when buying eggs. The effort attempts to scramble public perception into believing dollar inflation – the worst in decades – is less volatile than the so-called inflation hedge.
Related Reading | Federal Reserve’s Stance on Monetary Policy Remains Unchanged: What This Means for Crypto
But instead, the St. Louis Federal Reserve is legitimizing BTC as a unit of account.
St. Louis Fed uses Bitcoin to price eggs. | Source: FRED Blog
Federal Reserve Uses BTC As Unit Of Account, Proving The Satoshi Is Possible
According to the Cambridge Dictionary, to have “egg on your face” means to look “stupid” for something you have done.
In this egg on face moment for the FRED, comparing Bitcoin to the dollar seriously legitimizes the cryptocurrency and proves even the Fed is capable of figuring it out as a unit of account.
Is Bitcoin too volatile to be used as a unit info account? | Source: BTCUSD on TradingView.com
Pundits often cite the high price per Bitcoin as a reason it should be ignored as a unit of account. The FRED blog has as Satoshi intended, reduced each BTC to its smallest unit of measurement, the satoshi. The smallest unit of account of each BTC is named after the coin’s mysterious creator.
Related Reading | Will ESG Be Behind The Next Bullish Bitcoin Narrative?
Each satoshi, or sat for short, is the equivalent of 0.00000001 BTC. Every dollar is roughly 3100 sats currently. According to the FRED, a carton of a dozen grade-A eggs costs roughly $2.50 in USD. The above math adds up to about 7750 sats, or 0.00007750 BTC. If the Fed can get used to pricing things in Bitcoin, so can everyone else.
Bitcoin is designed to disrupt everything the Federal Reserve stands for. And for that reason, promoting the cryptocurrency as a unit of account inadvertently is leaving egg on the face of the Fed.
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