Renowned economist Mohamed El-Erian said he bought bitcoin a few years ago, but did not properly estimate when to sell due to “behavioral errors”.
The chief financial officer of Allianz revealed that he bought an unspecified bitcoin number in the winter of 2018, when the price of the most popular cryptocurrency in the world fell close to $ 3,000 from $ 19,000 a year earlier.
“I felt compelled to buy,” El Erian told CNBC’s Dan Murphy. The famous economist maintained his position until the end of 2020, when bitcoin regained the level of 19,000 dollars. A few months later, bitcoin expanded its rally, reaching record levels – over $ 60,000.
“Do not ask me about the valuation of Bitcoin. I do not understand why $ 60,000 is the right level, and not $ 68,000,” he added.
El Erian categorized Bitcoin investors into three categories: conservatives who invest in the long term, in professionals who want to diversify their portfolios and in speculators of daily transactions.
The economist said he would feel comfortable buying Bitcoin again only when some of the market speculators “go out”. The first two types of investors, he said, are “the strong foundations for buying cryptocurrencies in the long run.”
Like Bitcoin enthusiasts, El Erian believes that cryptocurrency is a “subversive force”. But he does not expect it to ever become a “world currency” that competes with the US dollar.
“I think it will always be in the ecosystem, but it is not going to be a world currency,” he said. “It is not going to replace the dollar.”
Contrary to many skeptics, however, the former PIMCO CEO does not believe that Bitcoin can be “regulated”.
“If the West does not pay attention, China will” set the rules “globally”
As more and more institutional investors enter the market, El Erian believes that the cryptocurrency industry should start engaging with regulators as soon as possible to avoid the regulatory “winds” faced by internet giants such as Amazon. , Google and Facebook.
“When I talk to people in the cryptocurrency industry, I tell them you have a responsibility not to repeat the Big Tech mistake,” El Erian said. “The big mistake of Big Tech was that they did not realize that they were becoming systemically important, so they did not engage in precautionary regulatory discussions.”
“The cryptocurrency market must take seriously that there are concerns about illegal payments, fraud and the stability of the platform,” he added.
He also warned that China could seek to lead the digital currency and blockchain to the detriment of the United States and other Western countries.
While the world’s second-largest economy has largely banned cryptocurrency-related activities, it has ambitious plans for the central bank to issue its own digital currency and implement blockchain technology that supports many cryptocurrencies in other areas, such as Copyright.
“If the West does not pay attention, China will set the standards globally,” El-Erian said.
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I am Sophia william, author of World Stock Market. I have a degree in journalism from the University of Missouri and I have worked as a reporter for several news websites. I have a passion for writing and informing people about the latest news and events happening in the world. I strive to be accurate and unbiased in my reporting, and I hope to provide readers with valuable information that they can use to make informed decisions.
