The Chief Economic Adviser at Allianz, Mohamed El-Erian, believes that bitcoin will never replace the world’s reserve currency and that its price would never rise above $100,000. Nevertheless, he is confident that the cryptocurrency industry will endure the current bear market and continue to play an important role in “the ecosystem of payments.”
During a recent interview with CNBC, El-Erian stated that bitcoin is an innovative advancement that peaked (almost $70,000 in November 2021) due to the extreme investor frenzy, over-production, and over-consumption. The crypto winter and the unfavorable socioeconomic occurrences put a stop to this progress, and at the moment the ecosystem is “reinforcing itself,” he stated.
Bitcoin will not witness massive adoption: Mohamed El-Erian
The economist believes that the current stability of the asset suggests that the winter market has endured its frostiest conditions and now should be welcomed by investors. He states:
“To be clear, I do not think that bitcoin will become a global currency, I don’t think it will get massive adoption. When people say it will reach $100,000, $200,000, $300,000, they assume massive adoption: you are not going to get that.”
During the winter market of 2018, El-Erian bought bitcoin when it was nearly $3,000 but he sold it in 2020 when it was valued at $19,000.
One BTC worth $100,000 represents a significant achievement for the market, and several proponents have already predicted the future of the largest cryptocurrency by market cap. According to the chief investment officer of Bitwise Matt Hougan, the price of bitcoin will reach $100k in 2022 with Institutional Support.
Even several individuals outside of the sector, such as Zak Pendl, co-head of Global FX at Goldman Sachs, predicted a similar amount of trust in the crypto industry.