McDonald's Big Mac Price Index and Bitcoin
NAIROBI (Coinchapter.com) - Over the past decade, McDonald’s burgers have become an important comparison standard for purchasing power, also known as the McDonald’s Big Mac price index. Significantly, as the price of Bitcoin has risen sharply, fast food prices have not lagged behind. In 2014, one Bitcoin could buy about 125 burgers, when the price of Bitcoin was about $500, while a McDonald’s burger cost $4. Fast forward to 2024, when one Bitcoin is worth $70,000 at times, and can now buy about 10,769 of these burgers, each costing $6.5. This striking gap not only highlights the appreciation journey of Bitcoin, but also the dynamics of fast food prices and inflation.
As inflation soars, consumers' purchasing power is waning. This has left many people wondering if they can afford once-affordable items like McDonald's burgers. Fast food prices have soared since 2019, with the average item price at McDonald's up 141.4%, Taco Bell up 57.4%, and Chicken King up 80.1%, according to End Wokeness. The increase has outpaced wage growth, especially for low- and middle-income earners, according to the Economic Policy Institute.
Stan Druckenmiller, chairman and CEO of the Duquesne Family Office, has harshly criticized Bidennomics. He gave it an "F" grade, saying that excessive government spending has led to inflation similar to a depression. During Biden's first term, real wages have stagnated and many Americans face real challenges in purchasing basic necessities, such as fast food.
Food inflation has been a challenge for many consumers for years. As prices at McDonald's, Taco Bell, and Chicken King have skyrocketed, working people are finding it increasingly difficult to afford these meals. For example, the average price of five popular items at McDonald's has increased by 141.4%. In stark contrast, Bitcoin's growth provides a stark contrast.
In May 2024, the price of Bitcoin is $70,000. Ten years ago, the price of Bitcoin was about $500. During this period, McDonald's menu prices have increased significantly. For example, in 2014, the price of a Big Mac was $3.99, and now it is $7.49, an increase of 87.7%. Similarly, the price of a McChicken has increased from $1.29 to $3.89, an increase of 201.6%.
The value of Bitcoin has surged about 14,000% over the past decade, outstripping fast food price inflation. This massive appreciation means that even though the price of a Big Mac at McDonald's has increased, Bitcoin holders have seen a massive increase in their purchasing power.
Will Bitcoin's purchasing power remain high?
The gap between Bitcoin's value fluctuations and the continued rise in consumer goods prices has raised concerns about the digital currency's ability to serve as a reliable store of value. According to data, at the end of 2019, when the price of a Big Mac was $4.49, one Bitcoin could buy about 15,527 Big Macs. However, by mid-2024, as the price of a McDonald's Big Mac soared to $7.49, the same amount of Bitcoin could only buy about 9,306 Big Macs. This means a 40% drop in purchasing power.
This stark contrast highlights the challenges that Bitcoin holders face in maintaining their financial stability and ability to access everyday goods and services. As the cost of living continues to rise, the question of whether Bitcoin can effectively serve as a hedge against inflation has become a hotly debated topic within the cryptocurrency community.