Barclays Bashing Bitcoin with Farcical FUD Comparison to Infectious Diseases

Today Bitcoin is up a little from yesterday at $6.9k and Ethereum likewise at $418. A fairly balanced split of red and green charts for the top altcoins overnight.

The news streams this morning are relatively quiet with one astonishing exception that the mainstream media have picked up on. According to analysts at the banking behemoth Barclays PLC The investment mania for cryptocurrencies is like an infectious disease whose transmission rate may be declining.

Before even reading the article you can hear the desperation of the old-money bankers in fear of their jobs, the writers knowing full well that cryptocurrencies and blockchain are, and will continue to be a very serious threat to the traditional banking sector and a significant number of jobs in the financial sector.

The statements made in the article itself describing the methods used to reach this laughable claim serve only to further heighten how desperate Barclays is to quash interest and use of crypto and blockchain tech.

The claims were made in a note to clients by lead analyst Joseph Abate and comes across as a being written by a well-educated child trying to justify getting its own way after realising having a screaming tantrum wasn’t getting them anywhere fast.

Abate and his team of analysts apparently set about attempting to value Bitcoin and future prices using a mathematical model that likens the spread of interest and adoption of Bitcoin to the spread of infectious diseases.

For those not overly familiar with mathematical modelling and statistical manipulation – this is how data can be used to tell any story you want if you are selective with the data used and/or the comparisons and correlations you report as a result. Essentially the difference between correlation and causation.

Using the spread of infectious disease as a comparison model sounds like it should make sense – however, the reality is whilst the data may well correlate – the underlying fundamentals of the statistics are entirely different. For a start, the spread of infectious disease is not easily controlled and individuals rarely seek out infections – investors in Bitcoin on the other hand have made a conscious decision to enter the market.

Just because both data sets correlate (appear the same, or have the same pattern when charted) now, it does not mean that it will continue. You really don’t need to look far to find other equally ridiculous correlations that obviously have no relational effect on each other – the only reason we notice them is because the subject matters are a little further removed from each other.

Take this example:

Per capita consumption of cheese (US)

correlates with

Number of people who died by becoming tangled in their bedsheets

If we were to take the same approach as Abate and his team of analysts we could run with a story suggesting in the nature of public health and safety, cheese and bedsheets should be taxed heavily to reduce the clearly increasing number of fatalities. The reason we don’t run such ridiculous claims is we’re not idiots, and don’t assume the public are either. (If you would like to see more amusing facts that correlate, this site has 30,000+ examples).

Had Abate and his analysts chosen a more realistic and recent data model that actually related to the sector – for example the growth in number of individuals using/connected to the internet, or use and adoption of search engines - the research and conclusions might hold water. As it stands – all Barclays have achieved is yet more pointless FUD with an attention grabbing headline.

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Created: Wednesday, April 11, 2018

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