El-Erian’s Perspective on Bitcoin

Mohamed El-Erian, the Chief Economic Advisor at Allianz, expressed intriguing thoughts on Bitcoin during a recent CNBC interview. He believes that Bitcoin might eventually evolve into a viable store of value, although he’s currently not invested. However, he’s keeping his wallet ready for potential investments if Bitcoin’s price takes a nosedive to $5,000.

Speculative Trends and Current Prices

In a classic ‘I told you so’ moment, El-Erian dismissed the dramatic price surges of Bitcoin back in late 2017 as sheer speculation, triggered by a rush of newcomers eager to hop on the crypto craze. He suggests that we shouldn’t expect it to bounce back to its previous highs any time soon, saying,

“I don’t think you get all the way back to $20,000… You need a base first.”

The Future of Digital Currencies

While Bitcoin as we know it may not hold, El-Erian predicts a future where digital currencies, albeit under public sector control, will thrive. He asserts,

“The blockchain technology, take that seriously.”

Essentially, he sees Bitcoin transitioning more into a commodity than a functional currency, allowing people to trade it like gold rather than use it for buying groceries.

Gradual Adoption Ahead

With a skeptical eye, El-Erian opines that the adoption of cryptocurrencies will unfold at a much slower pace than enthusiasts anticipate. Back in 2017, he foresaw the Bitcoin boom but warned against the rush towards mass adoption, attributing the slowdown to governmental interventions. He continues to hold this view today.

Bitcoin’s Current Status

As we stand, Bitcoin is trading at around $5,885, which is a significant drop of nearly 4% on the day and over 20% for the month, suffering a dramatic fall below the $6,000 mark recently—its lowest price point in 2018. It’s safe to say that while Bitcoin might be flapping its wings, it’s yet to take flight.