CNBC’s “Squawk Box” recently interviewed Mohamed El-Erian, a chief economic adviser at Allianz, a German corporate and industrial insurance provider and asset management behemoth. During this interview, El-Erian claimed that Bitcoin should be a definite buy if its price falls below $5,000 USD.
Making his comments right after BTC fell below the $6,000 USD support line, he stated that he sees this line as the absolute support, one that will be strongly defended by “the people who truly believe in Bitcoin”.
“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,” were his exact words. He added that he doesn’t have much data to support these claims and that his prediction is mostly based around a “gut feeling”.
According to those comments, it’s clear that he simply feels like this is the moment where Bitcoin investors will react to the endless wave of sell-offs and price drops which have been the staple of the last, almost 7-month long bear market. The market fell quite a long way from the turn of the year highs (BTC is down more than 70%) and El-Erians words do ring as if he feels a turn in crypto fortunes could be coming.
El-Erian also feels that cryptocurrencies will survive in the future, but will evolve into different assets than they are now.
“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,” he said. “But the blockchain technology, take that seriously.”
He supports the blockchain as a revolutionary invention but sees crypto as the commodities of the future, with public sector having a much larger influence over them than it has now.
“It will be a means of exchange,” El-Erian concludes. “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.”
El-Erian has previously spoken for increased government influence in crypto as well, claiming that countries are leaving conventional cash behind and moving into a territory where government issued cryptocurrencies will become a thing.
“Is there a role for cryptocurrency in the future? Yes, but critically, officially sanctioned, that’s very different. It’s not something that we’re going to see in the next three to five years … because people’s habits and people trusting in the new medium and change doesn’t happen overnight.”