New York, NEW YORK – Europe is known for many things, quaint market towns, beautiful scenery, culture and history. But it’s long history has made it conservative, especially in areas such as fintech innovation. So when Mohamed El-Erian, the chief economic adviser of European financial services giant Allianz issues a “buy call,” for Bitcoin, it’s worth taking note. Speaking to CNBC’s Squak Box on Friday, El-Erian, considered one of the most influential financial market thinkers in the world said,
“I do think that you need to establish a base whereby the people who really believe in the future of Bitcoin consolidate and then that provides you a lift.”
And while El-Erian made his “buy” call anytime Bitcoin is around US$5,000, the cryptocurrency markets, almost as if they had heard him beforehand refused to budge below that level. Instead cryptocurrency markets have risen since last week’s lows, with Bitcoin trading well above US$6,000 at 10.30 a.m. Eastern Time. And while bitcoin has fallen some 70 percent off its 2017 peaks, it’s reaching a point where even traditional sceptical and conservative authorities such as El-Erian believe that it’s time to go in. As to what form cryptocurrencies will take in the future, El-Erian does not liken them to currencies in the traditional sense and suggests that they are more like commodities, adding,
“I suspect that if you look 10 to 15 years down the road, we will have digital currencies but the public sector will have involvement in that. It will not be pure Bitcoin.”
“But the blockchain technology, take that seriously.”
El-Erian’s comments almost seem to echo China’s approach. Although China has banned the trading in cryptocurrencies as well as cryptocurrency exchanges and initial coin offerings (ICOs), a method of raising capital where a company issues its own digital coins in exchange for more liquid cryptocurrencies such as Ethereum or Bitcoin, it has poured billions of dollars into the blockchain and latest developments such as the patenting of a digital currency wallet seem to suggest that the Chinese are preparing to launch their own cryptocurrency.
El-Erian also said that he believes that 10 years from now, Bitcoin will be a store of value and that it will still continue to exist and that people can trade, but that its chief function will still be as a store of value.