Bitcoin’s Purchasing Power Growth Over the Past Decade
Bitcoin’s purchasing power, as measured by the Big Mac Index, has seen a remarkable increase in the last ten years. In 2024, one Bitcoin can now buy approximately 10,500 Big Macs, marking a substantial 20,488% rise from just 51 Big Macs in 2015. This growth underscores Bitcoin’s significant appreciation compared to a consumer staple like the Big Mac.
The Big Mac Index, originally conceived by The Economist, acts as an informal measure of purchasing power parity by comparing the price of a Big Mac in different countries to evaluate currency valuation. While Bitcoin’s value has surged, traditional assets like gold have also experienced growth, albeit at a slower pace. During the same period, gold’s purchasing power in terms of Big Macs increased by about 35%, exhibiting a more modest rise in comparison to Bitcoin.
The official Economist Big Mac Index also provides insights into currency valuation trends, such as the British pound being overvalued by 3.6% against the US dollar as of July 2024. This index offers a glimpse into global economic conditions and currency fluctuations, reflecting wider market trends.
Among all currencies tracked, only the British pound, Swiss franc, Uruguay peso, Argentine peso, Norwegian krona, and euro are currently overvalued against the dollar.
The data underscores Bitcoin’s volatile yet upward trajectory, positioning it as a distinctive asset class with considerable purchasing power growth in the past decade.
The cost of a Big Mac in the United States was $4.29 in 2015 and has now risen to $5.69, representing a 32% increase.
The argument that Bitcoin is not a hedge against inflation holds true only in short timeframes. While over a single day or month, Bitcoin may not compete with more stable assets like US Treasuries or many fiat currencies, over the past decade, not even gold has been able to match Bitcoin in terms of raw purchasing power.
Even when narrowed down to just five years, Bitcoin still outperforms by buying 8,500 more Big Macs per coin. Therefore, while it is a stronger statement to claim that Bitcoin acts as a hedge against irresponsible central bank policies, it remains valid that Bitcoin surpasses inflation, particularly in the context of Big Macs.
