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Bitcoin [BTC]: Niall Ferguson accepts he was wrong about cryptocurrency turning out to be a delusion

Akash Anand

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Bitcoin [BTC]: Niall Ferguson accepts he was wrong about cryptocurrency turning out to be a delusion
Source: Pixabay

The acceptance and adoption of Bitcoin [BTC] and other cryptocurrencies across the spectrum has come a long way, thanks to the contributions of several proponents and critics of the industry. One of the first critics to have come around to the idea of Bitcoin is British financial historian, Niall Ferguson. He was previously a staunch critic of the cryptocurrency field and had even stated that Bitcoin would “turn out to be a complete delusion”.

In the recently concluded Australian Financial Review Business Summit, Ferguson stated,

“I was very wrong. Wrong to think there was no […] use for a form of currency based on blockchain technology.”

The historian revealed that he had completely dismissed the idea of Bitcoin and cryptocurrencies, despite his son coaxing him into buying some. Ferguson had reportedly claimed that investing in something as unreliable and weird like blockchain technology was a foolish financial investment. In his words,

“If I had listened to my son, I would have increased the dollar value of my investment by a factor of 45 — or, if you prefer, I’d have made a return on the investment of 4,436%… The moral of the story is clear: when it comes to technology, pay heed to teenagers.”

During his speech at the technology summit, Ferguson said that Bitcoin’s price correction from its December 2017 high to its current $4000 valuation was not something to be extremely worried about. According to him, the price was still a long way from zero and that Bitcoin will not turn out to be a complete delusion like he thought he would.

However, Ferguson expressed skepticism about stablecoins and its functionalities, especially Tether [USDT].

Niall Ferguson had grabbed headlines previously when he stated that Bitcoin can be the financial approach to the future. He stated,

“The novelties, the things that will really matter ten years hence are still relatively small in scale. Whether its bitcoin or cryptocurrency generally or the massive revolution in online payments that is being achieved by the big Chinese tech companies, that’s the financial system of the future, and it is still small enough not to be systemically important in 2018.”





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Bitcoin

Bitcoin’s on-chain/off-chain valuation indicators the key point of focus as coin heads to $13,000

Akash Anand

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on

Bitcoin's on-chain/off-chain valuation indicators they key point of focus as crypto heads towards $13,000
Source: Pixabay

With the rise in Bitcoin’s price, the rest of the cryptocurrency market has followed suit by displaying a green trend across the board. In a recent series of tweets by popular cryptocurrency analyst Adam Tache, users were informed about the top Bitcoin on-chain and off-chain valuation indicators, derived from on-chain valuation models.

The analysis touched on the Mayer Multiple created by dividing the price by the all-important – 200 day moving average. The current average Mayer Multiple stands at a figure of 1.39, which may climb higher. Looking at previous figures, the normal Mayer Multiple figures stated that if the value shoots up to 2.4, then Bitcoin eventually retraces back to a comfortable 1.5. The Mayer Multiple is usually considered as the original indicator used to clock the valuation of Bitcoin.

Another major indicator discussed in the thread was the NVT Ratio invented by Willy Woo, Partner at Adaptive Fund. The indicator is used to calculate Bitcoin’s prominence or value in the cryptocurrency space by evaluating the amount transacted on the blockchain as a “proxy for investment flow and bear and bull market cycles.”

At the moment, the NVT ratio for Bitcoin is in an abnormal region compared to the start of previous bullish patterns. The NVT ratio was above the “bear market” separator, which meant that the cryptocurrency was overbought. When Bitcoin is overbought, it usually means that the buying pressure is much higher than the selling pressure. Adam Tache opined,

“NVT signaling overbought is likely due to a number of factors — namely the proliferation of exchange-based, purely off-chain txs driving short-term price action.”

The analysis also pointed out the liveliness of the Bitcoin indicator created by Tamas Blummer. The indicator showed the inverse count of lost or ‘HODLed’ Bitcoin, while stating that when the ratio increases, long-terms holders of the cryptocurrency decrease their positions. The indicator conveyed accumulation of Bitcoin when the ratio decreased.





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