Measured in Big Macs, Bitcoin’s (BTC) purchasing power is approaching its highest level since the 2017 bull market, offering yet another indicator of the digital currency’s rapid appreciation.
The global Bitcoin purchasing power index (PPI), which measures how many McDonald’s Big Mac hamburgers you can buy with 1 BTC, rose 0.2% to 6,341.26 on Wednesday. Put differently, on average globally, a whole Bitcoin can buy you 6,341.26 Big Macs.
In the U.S., based on current prices for both, you can get 3,274.91 Big Macs for one Bitcoin.
The last time Bitcoin’s purchasing power was this high was during the 2017 bull market, when the digital currency peaked near $20,000. On Dec. 17 2017, 1 Bitcoin was worth 6358.5 Big Macs. During the depths of the 2019 bear market, the Bitcoin PPI reached the low 1,200s.
The Bitcoin PPI is based on the famed Big Mac index that was developed by The Economist in 1986 as a way to gauge purchasing power parity across currencies. Purchasing power is a useful way to measure how many goods and services one unit of money can buy. Although the Big Mac index began as something of a joke, it has become a leading indicator of purchasing power and has been used in dozens of academic studies.
Bitcoin’s PPI is up more than 41% since the beginning of October; over the same period, Bitcoin’s price has appreciated 39%, according to TradingView data. Year-to-date, the Bitcoin price is up by 128%.
Bitcoin’s store-of-value characteristics are perhaps its most compelling use case. The digital currency has emerged as a reliable inflation hedge–a fact that is further underscored by the PPI.