Citi put out an all-time classic of a report on bitcoin yesterday, as you may have already read about here. And when we say classic, we mean one of the most execrable pieces of propaganda masquerading as “research” that we have ever come across.
Not only was this “report” actually just a massive bitcoin-shilling exercise, it also contained some really quite embarrassing errors from what is meant to be one of the top banks in the world (and their “premier thought leadership” division at that).
The error that was probably most shocking was the apparent failure of the six Citi analysts who authored the report to grasp the difference between basis points and percentage points. As a refresher, the report said the following about illicit transactions in bitcoin, and then proceeded to compare that with those done on regular credit and debit cards:
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.
As it turned out, the Fed study they refer to had actually said that fraud represented 13.46 basis points — just the 100-fold difference, then. So we pointed this out to Citi who told us they would correct the report, and they stayed true to their word. Here’s the new graphic putting things right:
Funny, isn’t it? Why didn’t Citi write that “13.46bp” figure as “0.1346%” so as to make the comparison easier to see? It’s almost as if they want their readers to be confused with this crime against charts. Also do note the text at the top of the graphic, in particular this bit:
Security issues with cryptocurrency do occur, but when compared to traditional payments, it performs better.
Doesn’t quite work now, that, does it? They must have been pressed for time. This, meanwhile, is how that section of the main text now reads:
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 basis points of aggregate credit and debit card network activity in the U.S.
So the numerical mistake is fixed but not the implication. Absolute jokers.
And now that we’ve got through the wordy stuff, feast your eyes on some of the other charts in the report. We’ll let the charts do the talking:
Later we are given another version of that chart:
They must have been quite pleased with the “North Star” idea. The term is used 18 times in the report.
Oh and we should just leave you with Citi’s “acknowledgment” — they’re kind enough to not take all the praise for their steaming pile:
In preparing to write this report, we completed a series interviews (sic) with CEO’s (sic) and professionals of some of the leading custodians, prime brokers, exchanges, infrastructure, and asset management companies, in addition to select experts within Citi. We thank them for all of their sharing their knowledge and expertise.
We would also like to thank these “CEO’s” and “professionals of some of the leading custodians” for “all of their sharing their knowledge and expertise”, and for making sure all viewpoints were covered, so we leave you with a picture of the really wide-ranging bunch Citi chose for their report:
Hey Citi, your bitcoin report is embarrassingly bad — FT Alphaville
Axes of evil — FT Alphaville