The FRED graph above tracks the price of eggs. Specifically, a dozen large grade A chicken eggs, in U.S. dollars, for each month since January 2021.
This graph is a histogram, otherwise known as a bar graph, so the length of each bar represents the full price. Merely glancing at the heights of the bars shows us that the price fluctuates over time, with a low of $1.47 and a high of $2.52 as of April. This runny volatility is why food prices, along with energy prices, are often excluded from monetary policy analysis.
Cracking open this first concept is fairly simple, but the FRED Blog team hatched the idea of asking another question: What would the graph look like if we purchased that same carton of eggs with bitcoins instead of U.S. dollars? The graph below shows this. Because a bitcoin is worth so much more than a carton of eggs, we multiplied the price by 100 million to express it in so-called satoshis, which is the smallest subunit of bitcoin.
The price fluctuates quite a bit, between 2829 and 6086, which is much more than it did for the U.S. dollar price. 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.
How these graphs were created: First graph: Search FRED for “price of eggs”; the series we use should appear at the top of the results. Restrict the sample period to start in January 2021. From the “Edit Graph” panel, use the “Format” tab to choose “Bar” as the graph type. Second graph: Take the first and add a series to the first line by searching for and selecting “bitcoin price” and applying formula a/b*100000000.
Suggested by Christian Zimmermann.