Allianz chief economic adviser Mohamed El-Erian has recently argued that bitcoin, the flagship cryptocurrency, is worth purchasing if it gets closer to the $5,000 mark, or dips below it.
El-Erian is notably considered one of the most influential market thinkers alive, and while speaking on CNBC’s “Squawk Box,” stated that the flagship cryptocurrency is worth considering around said territory as its most fervent believers may support that price level.
I don't think you get all the way back to $20,000, but 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.
Bitcoin is currently trading at $5,920 after falling 2.1 percent in the last 24-hour period, according to CryptoCompare data. The flagship cryptocurrency has been enduring a bearish trend since late last year, when it hit its near $20,000 all-time high.
He noted, however, that the $5,000 price level was a “gut feeling,” and didn’t back his figures with any analysis. Per the renowned economist cryptocurrencies will be seen as commodities in the future, as “the public sector will have involvement” in the crypto ecosystem.
According to him, the flagship cryptocurrency won’t be used as a currency in the future. He said:
It will be a means of exchange. It's not going to be a currency, it's going to be another commodity-like asset out there that you can trade, and mainly as a store of value.
As CryptoGlobe covered, El-Erian has in the past argued that an emerging cashless society may see governments issue their own “officially sanctioned” cryptocurrencies. This development, he noted, won’t be seen in the next “three to five years,” as people’s “habits and people trusting in the new medium and change doesn’t happen overnight."