Recently, Mohamed A. El-Erian, “Chief Economic Advisor at Allianz, the corporate parent of PIMCO where he formerly served as chief executive and co-chief investment officer”, shared his thoughts on Bitcoin.
El-Erian, who is the former chair of President Obama’s Global Development Council (2012–17), made his comments during a conversation on 31 October 2022 with Andrew Ross Sorkin, co-anchor of CNBC’s Squawk Box.
“Bitcoin and crypto was going through what tends to happen to every innovation, which is the initial period of over consumption and over production. We had a proliferation of crypto related products. You had lots of people rushing in. You had Bitcoin going to almost $70K and then like most innovation that first cycle ends in tears. Then you get a reinforcement, if you like, and what we’ve seen.
“If you are a crypto fan, you should welcome the relative stability we’ve seen over the last few months. That suggests that you’ve shaken out a lot of the excess.“
Sorkin then interjected to ask if this means that that a true floor for the Bitcoin price is being created.
“I don’t know about a floor, but it is the moment where you have a better basis. Now to be clear, I do not think that Bitcoin will become a global currency. I don’t think you’re going to get massive adoption. When people say we’re going to $100K, $200L, $300K, they assume massive adoption. They’re not going to get that, but crypto can and should survive as part of the ecosystem for payments and as an asset class, speculative as it is, but there’s an asset class. It just needs to be better regulated.“
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