The value of a Bitcoin essentially depends on your country of residence. A famous metric that has been used for years helps remind this.
If A Famous Metric Is Used In Bitcoin
The Big Mac Index acts as a measuring tool to calculate the value of a currency in different countries. The Big Mac Index is an index published by The Economist magazine that shows the price level and purchasing power of many countries. The index takes its name from Big Mac, a hamburger type sold in McDonald’s restaurants. It was first published in September 1986.
When The Economist published the Big Mac Index, a misleading financial measure in 1986, it left an indelible mark on finance. Now, this measure has also come to Bitcoin.
The metric claimed by The Economist serves as a useful metric for the value of currencies around the world, also known as the “purchasing power parity” of a currency, or PPP.
This is because no matter which country you visit, every McDonalds burger is the same. However, the price varies by country; For $ 5, you can buy one in the US or two Big Macs in Mexico. Since every McDonalds burger is the same all over the world, its purchasing power seems to be lower in Mexico based on the value of a dollar.