Renowned Oxford-educated British financial historian Niall Ferguson, a man named in 2004 as one of TIME magazine’s 100 most influential people in the world, has admitted that he was “very wrong” to think that Bitcoin would “turn out to be a complete delusion.”
Ferguson, who has taught at Cambridge, Oxford, and Harvard, published in 2008 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.
Currently, Dr. Ferguson is the Milbank Family Senior Fellow at the Hoover Institution (part of Stanford University), “a public policy think tank promoting the principles of individual, economic, and political freedom,” and a senior fellow of the Center for European Studies, Harvard.
Ferguson’s latest comments about Bitcoin reportedly came on Tuesday (March 5th) evening while speaking at a dinner as part of the Australian Financial Review Business Summit (held March 5–6 at Hilton Hotel in Sidney, Australia):
“I was very wrong. Wrong to think there was no […] use for a form of currency based on blockchain technology.”
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 to “buy some bitcoin.”
He 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.”
Another interesting observation that Ferguson made in that article was that he should have taken American economist Dr. Paul Krugman’s September 2014 dismissal of “bitcoin fever” as the product of “libertarian anti-government fantasies” as a signal to buy Bitcoin since “this was the same Krugman who in 1998 predicted that ‘the growth of the internet [would] slow drastically’ as ‘most people have nothing to say to each other’.”
He also wrote back in October 2017 that even if the crypto bubble burst, he could see “at least three other uses” for blockchain technology and cryptocurrencies:
- “… bitcoin has established itself as a kind of digital gold: a store of value for wealthy investors, especially those located in countries with weak rule of law and high political risk.”
- “… ‘initial coin offerings’ that raise money in bitcoin and another big crypto-currency, ethereum, have emerged as a quick and easy way to finance innovation — a digital alternative to issuing shares.”
- “… because blockchains are a near-unhackable, cryptographic method for preserving data across a computer network, they can be used for a whole variety of transactions.”
Now, going back to Ferguson’s remarks on the evening of March 5th, he also spoke about Bitcoin’s price correction from an all-time high of almost $20,000 in December 2017 to almost $4,000 in March 2019, noting that the price “remains a long way from zero”, and saying that he now doesn’t think that Bitcoin “will turn out to be a complete delusion.”
He also expressed skpeticism towards fiat-collateralized cryptocurrencies (such as Tether), although it is worth noting that last month, he joined as an advisor a crypto project called Ampleforth that is developing an algorithmic stablecoin.
Finally, talking more broadly, Ferguson predicted that the next decade would be “a truly revolutionary time” unlike the previous decade (where progress was impacted by the regulations introduced following the 2007–2008 financial crisis).