A Bloomberg analyst compares cryptocurrencies between quick ‎gains and high risks

Bloomberg co-author Niall Ferguson said in a recent report that blockchain currencies not only survived the collapse of the FTX cryptocurrency exchange, but were the investment of the year. It has been shown that decentralized finance does not require exchanges for trading, according to the report.

Investment of the Year: Comparing these returns with other asset classes, the Scottish historian who worked as a fellow at the Hoover Institution said that Bitcoin has risen by 167% since the beginning of the year until now. The price of Ethereum rose by 91%, while the Nasdaq rose by 36%. The S&P 500 rose 19%. Gold rose by about 10.7%, and with regard to oil or a broad basket of commodities, it fell by 10% to 12%.

He pointed out that a year ago, many of us thought that the matter was over for cryptocurrencies and that the naysayers would be vindicated.

Financial Scam: Sam Bankman Fried has fallen. He is currently in prison, after being convicted of seven counts of financial fraud, and his FTX exchange has long since disappeared. The fate of the competing Binance platform was at stake, after an investigation conducted by the Ministry of Justice. Its founder, Changpeng Zhao, pleaded guilty to money laundering violations, resigned as CEO and agreed to pay a $50 million fine, while the platform itself was fined $4.3 billion.

Lessons learned: By this time last year, the reputation storm sweeping cryptocurrency exchanges had convinced me that the entire edifice of blockchain finance was corrupt and that I should immediately sell most of my Bitcoin, Ethereum, and other cryptocurrencies, says Ferguson. I got it. Since I switched to cryptocurrencies in 2017. Considering that he was an idiot. Forgetting rule number “1” in cryptocurrency investing: once you buy things, you should always keep them.

He stated that the most profound lesson learned from the past 12 months is that cryptocurrency exchanges were never the key to the future of blockchain-based financial technology.

The only reason for the emergence of exchanges, according to the report, was the technical difficulty of actually exchanging cryptocurrencies without an intermediary.

The author of the report believes that cryptocurrencies remain a risky industry, partly due to the centrality of the relationship between traditional and decentralized finance. He also believes that the rise of Bitcoin and Ethereum for a year made it clear that the world is witnessing a great deal of mismanagement of fiat currencies, after two decades of inflation. Historically low, and appetite for cryptocurrencies is likely to continue to grow.

Of the 191 countries in the world for which data is available from the International Monetary Fund, only 22 countries have seen consumer prices rise by less than 10% since 2019. Another 68 countries have seen an inflation rate over four years ranging between 10% and 19%. ; And 42 countries between 20% and 29%; and 46 countries between 30% and 99%; While 13 companies witnessed a price increase of 100% or more

This last group would be larger if they had reliable data for Lebanon and Syria this year. The report also highlighted other lessons learned in 2023, which is that traditional finance continues to adopt cryptocurrencies, despite efforts by regulators and legislators to discourage it.