End of US Penny Minting Underscores Inflation, Potentially Elevating Bitcoin’s Role

• End of Penny Production: The last US penny was minted in Philadelphia on Wednesday, marking the cessation after President Trump’s February directive and earlier-than-planned template exhaustion.

• Cost Inefficiency: Each penny costs over $0.03 to produce, making continued minting uneconomical while over 250 billion existing pennies remain legal tender.

• Bitcoin’s Role: With inflation eroding fiat value, Bitcoin’s 21 million supply cap positions it as a hedge, potentially leading to depreciating prices for goods in BTC terms, as noted by economists like Saifedean Ammous.

Discover why the US penny production ends and how Bitcoin counters fiat inflation in 2025. Explore costs, economic impacts, and BTC’s fixed supply benefits—read now for insights on future money.

What Does the End of US Penny Production Mean for Fiat Currency?

The end of US penny production signals a significant shift in American monetary policy, driven by escalating costs and inflation that render the coin obsolete. The United States Mint in Philadelphia struck the final penny on Wednesday, concluding 232 years of this iconic coin’s manufacture. This decision, initially targeted for 2026, was accelerated due to depleted templates between June and September, following President Donald Trump’s February directive to the US Treasury to halt production.

How Does Inflation Impact the Value of the US Penny?

Inflation has progressively eroded the penny’s utility, with each coin now costing approximately 3.7 times its $0.01 face value to mint—around $0.037 per unit. This inefficiency stems from rising metal prices and labor costs, making production unsustainable. According to reports from Axios, the Treasury’s decision underscores broader economic pressures where fiat currencies lose purchasing power over time. Economist Saifedean Ammous explains that technological advancements drive deflation in goods and services, yet fiat systems counteract this through endless supply increases, leading to higher nominal prices. In contrast, hard assets like gold or Bitcoin maintain or gain value relative to depreciating dollars.

Data from The Gold Bureau reveals the US dollar has lost over 92% of its value since the Federal Reserve’s inception in 1913. Year-to-date in 2025, The Kobeissi Letter notes the dollar shed more than 10% of its purchasing power, contributing to Bitcoin’s surge past $126,000 in October. These statistics illustrate how inflation not only burdens low-denomination coins like the penny but also amplifies the appeal of supply-capped alternatives.

Frequently Asked Questions

What Caused the US to Stop Minting Pennies?

The US ceased penny production primarily due to economic unviability, as each coin costs over $0.03 to make versus its $0.01 value. President Trump’s directive in February prompted the Treasury to phase it out, with templates running out sooner than the 2026 goal, ensuring existing pennies stay in circulation as legal tender.

Is Bitcoin a Better Store of Value Than the US Dollar Amid Inflation?

Yes, Bitcoin serves as a stronger store of value during inflation thanks to its 21 million coin cap, preventing supply dilution that plagues the dollar. As demand rises, BTC’s price appreciates, allowing holders to benefit from falling prices of goods in Bitcoin terms—much like how median home prices have trended downward when measured against BTC over time.

Key Takeaways

• Penny’s Demise Highlights Fiat Flaws: Production costs exceeding face value by 3.7 times expose inflation’s toll on small-denomination currency, with over 250 billion pennies still circulating.
• Bitcoin’s Deflationary Edge: Capped at 21 million coins, BTC counters fiat’s endless printing, potentially reducing prices for assets and services in BTC units, as argued by economist Saifedean Ammous.
• Dollar’s Long-Term Decline: Losing 92% value since 1913 and 40% since 2000, the USD underscores the need for alternatives—consider holding BTC to preserve wealth against ongoing erosion.

Median home prices measured in BTC showcase how a supply-capped hard money benefits the holder through depreciating prices of goods, services and assets. Source: Priced In Bitcoin

Conclusion

The termination of US penny production in 2025 exemplifies the vulnerabilities of fiat currency systems, where inflation drives up costs and diminishes value, as seen in the penny’s $0.037 minting expense. Bitcoin emerges as a compelling countermeasure, with its fixed 21 million supply fostering deflationary dynamics that could lower prices for everyday goods and assets over time. As experts like Alexander Leishman of River note, “Inflation made the penny useless. Meanwhile, it’s making the sat more relevant every year,” pointing to subunits of BTC gaining prominence. While critics such as Paul Krugman emphasize the dollar’s ease of use, the long-term erosion—over 92% since 1913—suggests a pivot toward more resilient options. Investors should evaluate Bitcoin’s role in portfolios to safeguard against future fiat devaluation, staying informed on evolving monetary landscapes.

The last US penny, which is valued at $0.01, costs about 3.7 times its face value to mint, as inflation erodes the value of fiat currency. While it is no longer economically feasible to mint more US pennies, the coin will remain as legal tender, with the more than 250 billion physical pennies continuing to circulate.

“Inflation made the penny useless. Meanwhile, it’s making the sat more relevant every year,” Alexander Leishman, CEO of Bitcoin financial services company River, said, referring to the subunit of one Bitcoin (BTC).

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Bitcoin as a solution to the erosion of fiat money’s value

Bitcoin was created as an alternative monetary system that has a supply cap of 21 million coins, meaning that as demand for BTC increases, so should the price per coin.

Technological development is a deflationary force that makes the production process more efficient and reduces the price of goods and services over time, according to author, economist and BTC advocate Saifedean Ammous.

Fiat currencies, in contrast, fail to capture this price deflation because their supply is constantly increasing, resulting in reduced purchasing power over time, which is reflected in the higher prices of goods, assets and services.

In other words, the price of goods and services is not increasing; the value of fiat currencies is declining relative to goods, services and hard assets, according to Ammous.

If those same goods, services, and assets were denominated in BTC or some other hard money standard, prices would go down over time, the economist argues.

Source: Anthony Pompliano

The US dollar has lost over 92% of its value since the creation of the Federal Reserve Banking System in 1913, according to precious metals dealer The Gold Bureau.

Meanwhile, Bitcoin hit all-time highs above $126,000 in October, as the US dollar was on track for its worst year since 1973, according to market analysts at The Kobeissi Letter.

“The USD has lost about 40% of its purchasing power since 2000,” The Kobeissi Letter said in October, adding that it lost over 10% of its value year-to-date as of October.

However, economist Paul Krugman, who has long been critical of cryptocurrencies and BTC, said the dollar’s power rests in how easy it is to use, compared to BTC, which is difficult for the average person to hold and transact with.

“The whole point about the dollar is it’s really easy to use, and Bitcoin is not easy to use,” Krugman told podcast host Hasan Minhaj.

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