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The battle of purchasing power, BTC vs USD

The purchasing power of the US Dollar (USD) refers to the amount of goods and services that can be purchased with a certain amount of USD. It is determined by the inflation rate, which is the rate at which the general price level of goods and services is increasing over time.

When inflation is low, the purchasing power of the USD is high, meaning that a given amount of USD can buy more goods and services. Conversely, when inflation is high, the purchasing power of the USD is low, meaning that a given amount of USD can buy fewer goods and services.

To maintain the value of the USD and ensure its stability, the Federal Reserve, the central bank of the United States, has the responsibility of implementing monetary policy. This includes setting interest rates and controlling the money supply to keep inflation at a moderate level.

Overall, the purchasing power of the USD is an important economic indicator that reflects the state of the economy and the level of inflation, and it can have a significant impact on the daily lives of individuals and businesses.

Specifically, the chart shows the Consumer Price Index (CPI) for all urban consumers in terms of purchasing power of the consumer dollar in the US city average, which has been declining since the 1960s, dropping from 300 to the current 33.2 points (88.93%).

On the other hand, the purchasing power of Bitcoin in the same context has shown as quickly climbing, soaring from 33 in 2010 to the current 255 points, or a whopping 672.73% increase over the observable period of only 13 years.

Notably, Robert Kiyosaki, author of the best-selling personal finance book ‘Rich Dad Poor Dad,’  is also skeptical about the future of the USD, recommending his followers to buy Bitcoin, gold, and silver and referring to the US fiat currency as “toilet paper” and “fake money” that is pushing the “American empire to its end.”

Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.



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