Allianz chief economic advisor Mohammed El-Erian does not classify bitcoin as a financial mechanism that has become “too big to fail.” At the same time, the fall in cryptocurrency could shake the global financial system, he admitted.
“In a narrow sense, it is not too big to collapse. More broadly, this would be another challenge to the liquidity paradigm, where investors are simply betting on liquidity, he told CNN. – We have already been close to the incident three times, so you need to be careful. You never know what minor road accident will cause traffic congestion. ”
El-Erian expressed confidence in the continued spread of bitcoin among institutional investors, but doubted that the authorities would look at it calmly.
“This is an asset trying to take place, but it can take place only if the authorities allow it. Be careful, because you are not only coming from proliferation in the private sector, but also from the tolerance of the authorities. I’m not sure about the second one, ”he added.
El-Erian previously said that bitcoin “includes three things”, each of which attracts a different type of investor, but at the same time raises concerns for central banks. One of the groups believes that Bitcoin will become money, the second was forced to join the cryptocurrency market due to the lack of alternatives, and the third is speculators who are attracted by intraday fluctuations in the exchange rate by 20%.
“When bitcoin is trading above $ 50,000, all three of these ideas create problems for central banks. We will find that central banks are increasingly looking at cryptocurrencies as an area in which they should participate, and not just stay on the sidelines, ”he said.