Famed Economist Doubts Bitcoin Will Become Global Currency – Regulation Bitcoin News

Mohamed El-Erian is chief economic advisor for financial services company Allianz. He says bitcoin will not be replaced by the U.S. dollars and that it won’t become a worldwide currency. But, he says that the cryptocurrency is going to continue being part of the global ecosystem and not go away.

Bitcoin Won’t Become Global Currency Rivalling US Dollar, Says Economist El-Erian

Mohamed El-Erian, an economist of repute, spoke about cryptocurrency’s future in a Monday interview with CNBC.

El-Erian, chief economic advisor for Allianz is one of the biggest investment managers in the world. He was also the CEO and co-chief investor officer at PIMCO. El-Erian, an Egyptian-American businessman, is also the president of Queens College at Cambridge University.

While El-Erian believes that bitcoin is a “very disruptive force,” he does not think it will ever become a “global currency” that rivals the U.S. dollar. El-Erian said that:

I think it will always exist in the ecosystem but it’s not going to be a global currency … It’s not going to replace the dollar.

However, he also does not believe that bitcoin can be “regulated out of existence.”

El-Erian additionally revealed that he bought some bitcoin during the “crypto winter” of 2018 when the price of BTC plunged to almost $3,000 but did not specify how much he bought. “I felt compelled to buy it — I really did … I felt like I had framed it. I had this level, I had an entry point,” he shared.

The advisor to the economy kept his BTC position up until 2020, when bitcoin recovered its $19,000 mark. However, he admitted that he misjudged when to sell due to “behavioral mistakes.”

He divided bitcoin investors into three categories. The first is “fundamentalists,” who are investing for the long haul. The second is professional investors, who are looking to diversify their portfolios, and the last is day trading “speculators.”

He explained that the first two types of investors are “really strong foundations for that market long-term.” However, he noted that he would only feel comfortable buying bitcoin again once some of the speculators in the market are “shaken out.”

As crypto becomes more mainstream, he urges regulators to get involved sooner than expected. This will prevent the regulatory hurdles that face internet giants such as Amazon, Google and Facebook. “When I speak to people in the crypto industry, I say you have a responsibility not to repeat the mistake of Big Tech. The big mistake of Big Tech was they didn’t realize they were becoming systemically important, so they didn’t engage in preemptive regulatory discussions,” he detailed.

The Allianz economic advisor also warned that:

Crypto should be cognizant of the fact that illegal payments can occur. There’s concerns about fraud. There’s concerns about stability of platform.

In August, El-Erian said, “The time has come for more western governments to stop dismissing the crypto revolution as some mix of illicit payments schemes and reckless financial speculation.” He added: “I tend to tell people: be really careful. This is an asset that wants to establish itself, but it can only establish itself if governments allow it to.”

Is it possible to agree with the Allianz economist on bitcoin? Comment below to let us know your thoughts.

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