Last US penny minted shows why savers need Bitcoin
The United States minted its last penny on Wednesday in Philadelphia, ending 232 years of penny production due to the high cost of manufacturing the $0.01 coin, which costs 3.7 times its face value to produce. Despite no longer minting new pennies, the existing coins will remain as legal tender. Economists and analysts link this decision to inflation and the depreciation of fiat currencies, citing Bitcoin as a potential alternative with its supply-capped system. Bitcoin's rising value is contrasted against the significant loss of purchasing power of the US dollar since 1913. While Bitcoin advocates highlight its deflationary benefits and long-term value retention, critics argue that the cryptocurrency remains less accessible and harder to use compared to traditional currencies like the US dollar.
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The End of Penny Minting in the US
The last penny, nominally valued at $0.01, was minted by the United States Mint in Philadelphia, Pennsylvania, on Wednesday, marking the end of 232 years of new pennies being coined and circulated. US President Donald Trump directed the US Treasury to stop producing pennies in February, initially setting a 2026 target for the last minting. However, the Treasury exhausted the templates for manufacturing the coins between June and September, according to Axios.
The Cost of Producing Pennies
Interestingly, a penny costs about 3.7 times its face value to manufacture, meaning that each $0.01 coin actually costs over $0.03. While it is no longer economically feasible to mint new US pennies, they will remain as legal tender, with more than 250 billion physical pennies continuing to circulate.
Inflation and the Relevance of Bitcoin
“Inflation made the penny useless. Meanwhile, it's making the sat more relevant every year,” said Alexander Leishman, CEO of Bitcoin financial services company River, referring to the sat—a subunit of one Bitcoin (BTC). This statement highlights the growing conversation about Bitcoin as a solution to the erosion of fiat money’s value.
Bitcoin: A Deflationary Alternative
Bitcoin was created as an alternative monetary system with a supply cap of 21 million coins, which ensures that as demand for BTC increases, so does the price per coin. According to Saifedean Ammous, an author, economist, and Bitcoin advocate, technological development acts as a deflationary force, making production processes more efficient and reducing the price of goods and services over time. Unlike fiat currencies, whose supply continuously increases—resulting in declining purchasing power—Bitcoin showcases the benefits of a hard money standard.
Comparison of Fiat and Bitcoin in Purchasing Power
Ammous argues that prices of goods and services are not truly increasing; instead, the value of fiat currencies is declining relative to goods, services, and hard assets. If denominated in BTC or other hard money standards, prices for goods and services would decrease over time. The phenomenon of median home prices measured in BTC illustrates how a supply-capped monetary system benefits holders by depreciating the price of goods over time.
The Decline of the US Dollar
The US dollar has lost over 92% of its value since the creation of the Federal Reserve Banking System in 1913, according to The Gold Bureau. Meanwhile, Bitcoin hit all-time highs above $126,000 in October, as the US dollar faced its worst year since 1973, according to analysts at The Kobeissi Letter. "The USD has lost about 40% of its purchasing power since 2000," The Kobeissi Letter stated, adding that it lost over 10% of its value year-to-date as of October.
Criticism of Bitcoin's Usability
Not everyone is optimistic about Bitcoin's future as a monetary alternative. Economist Paul Krugman, who has long been a critic of cryptocurrencies, argued that the US dollar's power lies in its ease of use, compared to Bitcoin, which he described as "difficult for the average person to hold and transact with." Krugman explained, “The whole point about the dollar is it’s really easy to use, and Bitcoin is not easy to use,” during a conversation with podcast host Hasan Minhaj.