Mohamed El-Erian’s Perspective on Bitcoin
In an intriguing conversation with CNBC, Allianz’s Chief Economic Advisor, Mohamed El-Erian, shared his insights on the cryptic world of Bitcoin. He hinted at a future where Bitcoin (BTC) might be embraced as a store of value—a concept that’s been gaining traction among economists and casual investors alike.
Waiting for the Right Price
Currently, El-Erian doesn’t own any Bitcoin, but he’s not completely opposed to the idea of diving into the cryptocurrency pool—if the price dips to $5,000. Yes, you read that right! A gut feeling seems to be his guiding light, a little risky yet compelling strategy in a highly volatile market.
- Bitcoin’s Speculative Heights: Reflecting on Bitcoin’s wild ride back in 2017, El-Erian described it as mere “pure speculation,” where many jumped on the crypto “bandwagon” without really understanding the underlying mechanisms.
Can Bitcoin Bounce Back?
While many enthusiasts remain hopeful, El-Erian carbons his skepticism with a sprinkle of realism. He doesn’t see Bitcoin leapfrogging back to its previous heights of $20,000 anytime soon. However, he believes in establishing a solid base of genuine believers in Bitcoin to give it a more sustainable future lift.
Future of Cryptocurrencies
El-Erian’s crystal ball shows a landscape of digital currencies evolving, but likely under the watchful eyes of public sectors. He suggests that, in 10 to 15 years, we may still see digital currencies, albeit in forms different from current cryptocurrencies. Blockchain technology will play a pivotal role—mark his words!
Bitcoin as a Commodity?
When it comes to Bitcoin’s long-term purpose, El-Erian views it less as a currency and more as a “commodity-like asset”—something to trade and hold as a store of value. This aligns with how the U.S. Commodities Futures Trading Commission (CFTC) has perceived Bitcoin since 2015, classifying it as a commodity.
A Slow Adoption Rate
According to El-Erian, don’t hold your breath for rapid crypto adoption. He predicts a slower acceptance rate than many believers in the crypto community anticipate. Moreover, governmental interventions will likely hinder this growth. Back in September 2017, he had already warned about the impending price explosion but maintained that mass adoption would take time.
Current Market Status
As for today’s status, Bitcoin is trading at $5,885, showing a decline of nearly 4 percent in a single day, and about 20 percent over the month. Just a few days ago, on June 24, it dipped below the $6K mark, hitting its lowest point in 2018—not a pretty sight for those on the rollercoaster ride of crypto investments.
