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Financial Historian Dr. Niall Ferguson: ‘Covid-19 Has Been Good for Bitcoin’

Renowned financial historian Dr. Niall Ferguson says that “Covid-19 has been good for Bitcoin and for cryptocurrency generally.”

Some Background

According to the bio on his website, Ferguson is currently the Milbank Family Senior Fellow at the Hoover Institution (part of Stanford University), which is “a public policy think tank promoting the principles of individual, economic, and political freedom.”

He is also a senior faculty fellow of the Belfer Center for Science and International Affairs at Harvard, and a visiting professor at Tsinghua University, Beijing.

Ferguson, who was named in 2004 as one of TIME magazine’s 100 most influential people in the world, has taught at Cambridge, Oxford, and Harvard.



In 2008, he published the book “The Ascent of Money: A Financial History of the World“. This was later adapted for television as a five-part documentary that won the 2009 International Emmy award for Best Documentary.

In July 2020, Ferguson spoke to crypto journalist and podcast host/producer Laura Shin for episode #181 of the highly recommended “Unchained” podcast — which was released on July 14 — about the history of money and the macros factors affecting Bitcoin.

He started by talking about his background in economic/financial history:

“I’m a historian, as you said, and I spent my career working on financial history, which is really my core competence.

“Many years ago, too many to count, I wrote a doctoral dissertation on the German hyperinflation of 1923 and subsequently wrote histories of a couple of banking dynasties, the Rothschild’s and the Warburg’s so that was really my path into being an academic historian, and in 2008 I tried to knit together a lot of my earlier work in a book called The Ascent of Money…

“… that book started, I guess, as a Harvard course in international financial history and by 2006, ’07 I’d come to the conclusion that it should become a book and that there was going to be an almighty financial crisis and it would be rather good timing if I could bring it out around about the time of the crisis, and sure enough by the time I’d finished…the crisis was well underway.”

He next explained how he got involved in crypto.

Since Ferguson’s book “The Ascent of Money” came out in the same year as Bitcoin’s white paper (“Bitcoin: A Peer-to-Peer Electronic Cash System”), which was published by Satoshi Nakamoto, “it couldn’t be included in the book,” but it left him “intrigued” about Bitcoin.

At this point, it is worth pointing out that on 12 October 2017, Ferguson published a blog post titled “Bitcoin may go pop, but its revolution will go on”, in which he explained how “alarmists warning of a collapse miss crypto-currencies’ true potential.”

Here, he told the story of how on 7 October 2014, he had made the “worst investment decision” of his life by ignoring the advice of his then 15-year-old son (Lachlan Douglas Ferguson) to “buy some bitcoin.”

Ferguson told his son that putting money into something “based on some weird thing called blockchain technology” was a foolish financial investment, that “since ancient Mesopotamia, money has tended to be monopolised by states,” and that “the governments of the world are not about to let their monopolies on national currencies be undermined by a currency that’s already being used for nefarious purposes by criminals and money launderers.”

At that time, the price of Bitcoin was $334, and on 12 October 2017, when he created this blog post, it was $15,150:

“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.”

Going back to the interview with Shin, Ferguson said that around 2016-2017, he and his son “began really seriously thinking about crypto”, that his son helped him to greatly increase his understanding of Bitcoin, and that by 2018 (the 10th anniversary of “The Ascent of Money”), he had concluded that he had been “very, very wrong” and that Bitcoin “is part of a really extraordinary financial revolution.” This is why he updated this book with a chapter on crypto.”

Ferguson’s Most Recent Comments About Bitcoin

In a Bloomberg op-ed article (titled: “Bitcoin Is Winning the Covid-19 Monetary Revolution”) published on Sunday (November 29), Ferguson says that “we are living through a monetary revolution so multifaceted that few of us comprehend its full extent.” He says that this revolution is being driven by “technological transformation of the internet” and that it is being “accelerated” by the current COVID-19 pandemic.

Ferguson also says that “this year’s Bitcoin rally has caught many smart people by surprise,” perhaps none more so than prominent economist and Bitcoin skeptic Dr. Nouriel Roubini (aka “Dr. Doom”) who asked during an interview with Yahoo Finance on November 6 what he thinks about the fact that “a lot of folks” are “pretty bullish” on Bitcoin these days (with the Bitcoin price around $15,387 at the time).

Dr. Roubini replied:

“Well, first of all, I have pointed out that cryptocurrency is a misnomer, because for something to be a currency, you have to be a unit of account. Nothing is priced in Bitcoin or any other cryptocurrency. You have to be a single numerator, and with so many tokens, you don’t have a single numerator. You have to be a scalable means of payment, and with Bitcoin, you can make only five transaction per seconds. With a Visa Network, you can make 25,000. And you have to be a stable store of value that is not very volatile.

“Now, based on the first few criteria, Bitcoin is not a currency. It’s maybe a partial store of value, because, unlike thousands of other what I call shitcoins, it cannot be so easily debased because there is at least an algorithm that decides how much the supply of Bitcoin raises over time, because for most of those other ones, literally, is done ad hoc, and they’re being debased faster than what the Fed is doing.”

Ferguson says that “Roubini is not the only one who has been forced to reassess Bitcoin this year.” One example he gives is legendary billionaire hedge fund manager Ray Dalio, who admitted on November 17 that his assumptions about Bitcoin might be incorrect.

“Covid-19 has been good for Bitcoin and for cryptocurrency generally.

“First, the pandemic accelerated our advance into a more digital word: What might have taken 10 years has been achieved in 10 months. People who had never before risked an online transaction were forced to try, for the simple reason that banks were closed.

“Second, and as a result, the pandemic significantly increased our exposure to financial surveillance as well as financial fraud. Both these trends have been good for Bitcoin.”

He then goes on to say that “what is happening is that Bitcoin is gradually being adopted not so much as means of payment but as a store of value.”

Next, Ferguson talks about Bitcoin’s two unique features:

“First, as we have seen, Bitcoin offers built-in scarcity in a virtual world characterized by boundless abundance.

“Second, Bitcoin is sovereign. In the words of Casares, ‘No one can change a transaction in the Bitcoin blockchain and no one can keep the Bitcoin blockchain from accepting new transactions.’ Bitcoin users can pay without going through intermediaries such as banks. They can transact without needing governments to enforce settlement.”

Fergeson ends his article with a few words of advice for U.S. President-elect Joe Biden:

“Rather than seeking to create a Chinese-style digital dollar, Joe Biden’s nascent administration should recognize the benefits of integrating Bitcoin into the U.S. financial system — which, after all, was originally designed to be less centralized and more respectful of individual privacy than the systems of less-free societies.”

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