Bitcoin ponzi generates ponzi research

See the latest Australian dollar analysis here:

Will Bitcoin destroy the US dollar?

Last night Bitcoin bounce was triggered by a new Bitcoin report by Citi. The report was written for (and by?) children under the age of six. FTAlphaville does a good job of dismembering it:

On Monday one of the world’s top investment banks, Citi, put out a report called “BITCOIN: At the Tipping Point”, which has been causing quite a stir across the crypto-net and beyond. “Absolutely fantastic birds eye view of the bitcoin phenomenon from Citi,” tweeted crypto VC Nic Carter. “It’s incredibly well done and very fair. Highly recommend giving this one a read”.

We have read this report, in which it is claimed that “bitcoin’s global reach and neutrality could spur it to become the currency of choice for international trade” (!), and quite frankly we feel the idea that it is either well done or fair is absurd. We would highly recommend giving this one a miss (unless of course you want to share some ROFLs with a mate over the plethora of chart crimes it contains, which we will publish a separate post on).

The report comes from Citi’s “GPS” division, standing for Global Perspectives & Solutions, which the bank describes as its “premier thought leadership product”, helping customers to “navigate the global challenges, identify future themes, and prosper in a fast-changing world”.

So one might, as a result, expect some compelling visual aids. Instead, we get this graphic (do spend some time pondering that first stat):

Do the six Citi strategists who wrote the report really believe that 36 per cent of small-to-medium businesses accept bitcoin in the US? We really don’t believe that they possibly could.

And where does that stat even come from, we hear you ask? Luckily Citi points to a source:, a site that “translates bitcoin into plain English”. Excellent. Later in the 108-page report we are told the statistic “seems wildly optimistic”. Still though, makes a nice graphic doesn’t it? Bung it in, why not?!

They also tackle the tricky subject of Tether, the company that issues an eponymous dollar-pegged “stablecoin” that last week agreed to pay a $18.5m settlement to the New York attorney-general’s office after the latter found that the company had “recklessly and unlawfully covered up massive financial losses to keep their scheme going and protect their bottom lines”. Here’s Citi on Tether (emphasis ours):

Just as a high profile breach of security and theft of Bitcoin or other cryptocurrencies might undermine confidence in the system and lead to a reversal of the virtuous circle of institutional participation, a regulatory crackdown triggered by rumors of a broadly owned stablecoin not being fully backed could also cause a loss of confidence.

To that point, an anonymous blog circulated in mid-January 2021 described Tether as a possible “doomsday machine”. More telling than the arguments presented in that post, most of which were recycled and readily disputed, was the amount of attention that it received outside of the crypto industry. Unlike its nearest competitor, USDC, Tether is not fully transparent and does not allow for the audit of its collateral reserve.

OK we are going to pause here. Apart from the fact that the whole 108 pages of Citi’s report are made up of readily disputed claims and absurd statistics that are recycled from websites like, many of the arguments in this blog post were confirmed last week by the NYAG. Why is the amount of attention the post received “more telling” than the arguments themselves? They continue:

This lack of transparency has helped cast doubts on the solvency of Tether, but there are many established market participants that see no issue, a point underscored by the record amount of Tether minted in the early part of 2021 as discussed in Section IV.

Oh well, if many established market participants see no issue with Tether’s solvency and murky relationship with the truth, why should anyone else?! And they’ve printed billions of lookalike dollars in Q1 so . . . so . . . who cares? It’s almost as if the authors of this “March” report hadn’t seen the NYAG’s ruling from six days ago. Indeed, as they continue:

As also noted, Tether’s issuer is already being investigated by the New York State Attorney General. In relation to that inquiry, the group admitted to temporarily lending some of its cash reserves to a sister exchange as a type of bridge loan that has since been fully repaid, and the stablecoin’s Bahamian bank is adamant that every token is fully backed.

The firm’s top-notch Bahamian bank is ADAMANT, guys. Who can argue with that!?

Citi also tackles illicit transactions:

Concerns about illicit or illegal activity due to the anonymous nature of transactions on the public blockchain are another point of consideration for institutional participants that have a fiduciary duty to protect their clients’ assets. Figure 35 shows that Bitcoin along with a slew of other cryptocurrencies have indeed been subject to the illicit transfer and receipt of coins with such activity topping $20 billion in 2019 before falling back to only $10 billion in 2020. However, the extent of such activity can often seem overblown based on news headlines alone. In total, just over 2% of the activity in the cryptocurrency space was linked to illicit activity in 2019 and that total was down to only 0.3% in 2020.

To put that figure in context, a payments study commissioned by the Federal Reserve found that fraud represented 13.46% of aggregate credit and debit card network activity in the U.S.

Woah that’s a good stat isn’t it? That’s a lot of fraud! And for this stat the source is the Federal Reserve of America so we can trust this one, right? Let’s see exactly what the Fed says on that then, in the link they so helpfully provide:

The overall fraud rate, by value, for cards was stable. From 2015 to 2016, the overall fraud rate, by value, for cards was nearly flat, dropping slightly from 13.55 basis points to 13.46 basis points.

It seems that six strategists at Citi don’t know that there is a 100-fold difference between basis points and percentage points. SAD! After we pointed this out to Citi in an email, they said they were correcting it, but at this point the mistake still seems to be there.

The problem with this truly horrifyingly bad report is that its “bitcoin could become the currency of choice for international trade” line is good for headlines, and it has already made several in the mainstream press, including CNBC, Reuters, Bloomberg, and Yahoo Finance, all of which have written up the report without the slightest question over its legitimacy.

And news of it is now being spread across the internet by the likes of the Mooch himself:

Someone is shamefully wrong on the internet. Citi should retract this report immediately, not that they will. Citi declined to comment for this article.

David Llewellyn-Smith
Latest posts by David Llewellyn-Smith (see all)


  1. Using tether as evidence of bitcoin failing is like saying the US dollar is worthless because a few banks did some dodgy mortgage derivatives, except even less relevant.

  2. Research by the Ponz Institute, no doubt.

    It rubs the lotion on its skin
    Or else it gets the hose again

  3. Not many people are looking at Bitcoin as a currency these days …more as a store of wealth with potential to keep appreciating in value. Other Crypto projects such as Cardano and Polkadot are better engineered to perform day to day transactions. That said, I do see BTC having a dot-com like trajectory … but there is a lot of money to be made now.

  4. Lmmao … with its tax status, volatility, and accounting dramas – wheeeeee~~~~~

    I mean the whole thing started of as a means to wash illegal dealings …..

  5. PolarBearMEMBER

    Wow how embarrassment for Citi (and Bitcoin). “Premier though leadership product” ROFL!

  6. $536M traded in South Africa and NIGERIA! When I think of stable, trustworthy financial systems, Nigeria is always my first stop.

    • Real what – ???? – it crashes as hard as crypto when trade goes poof, same same deflationary qualities baked in, is it pure, do you have it with you all the time on your person, how do you get the wealth into it[????], its a commodity/asset class, what happens when someone brings a asteroid full of it into orbit?

      • PolarBearMEMBER

        I am suggesting that it has more lasting power than a bunch of algorithms running on servers. Sure there’s all the hassle of handling a high value physical object, but physical durability is its strength.

        • The State decides what is currency – en fin ….. something about law ….

          Now if people want to go all laissez-faire with memorabilia sort of collectables and then wonder why their lives are going down hill – see mirror …

          • PolarBearMEMBER

            Yes true. Just saying that gold and it’s status as a store of value has lasted longer than any state. As one of the least reactive elements in the universe, it will in fact last until the end of the universe. That’s a fairly long time.

          • “it’s status as a store of value has lasted longer than any state”

            Firstly in never “stored” anything let alone value, that can only be determined when taking price. As far as states go the same happens to gold currency for exchange – see dark ages for example E.g. coinage was melted down for decorative use.

            Lmmao Brilo boxes are worth more than gold …. The graph above illustrates the performance of Warhol’s Brillo Boxes at auction from 2002 to 2012. While the S&P 500 and the series progressed similarly from 2002 to 2005, Brillo Boxes sales gained traction in 2006. Since this time, they have consistently outperformed the S&P 500, reaching 600 in 2012. The highest selling sculpture from this series sold in 2008 for US$4.7 million at Sotheby’s New York.

  7. MathiasMEMBER

    Nigeria is using Bitcoins. Wow. You mean this place?

    Im envious lol. Sign me up bahahahahahaha.

    In fairness though, a lot of people are frustrated. Yeah, I can understand why there is a frustration to move it all into Bitcoins and escape the system. I think people have had enough of all thats going on and looking to escape it.

    I refer to what Jordies said, ” When your a black sheep, you might as well play the villain “. When you wake up each day in a Country where the Government is essentially at war against you on a near daily basis, its any wonder todays young are staying sane. The very Government todays young depend on are the ones shafting them and trying to put them in jail. When you complain about it or todays young are thinking of suicide, you get the usual response of ” Go call the nearest helpline “. The helpline tries to re-engage you into the property system so you’ll get a job, end up loaded with debt and comply in a system thats clearly destructive.

    There’s no way out of this system and I think people are looking for the nearest exit.

    Australia is one of the nicest countrys on earth. If this was any other country, Aboriginals would be planting bombs in peoples cars and Aussies would be assassinating Politicians where they stood. The fact we dont do these things is testament to just how peaceful Australians really are. I dont think Politicians realise just how lucky they have it in this Country.