Allianz Chief El-Erian Makes a U-turn on Bitcoin Adoption

On Tuesday, Mohammed El-Erian, the financial services firm Allianz’s chief economic advisor, shared his thoughts on cryptocurrency. Basically, according to him, cryptocurrency will reach universality as part of the broader financial ecosystem. He was speaking at CoinDesk’s Consensus: Invest Conference. El-Erian reiterated his earlier position that Bitcoin is a “commodity” and not a “currency.”

However, this is not the first that the finance analyst has given this definition. In a bid to clarify and eliminate confusion, El-Erian observed that people call Bitcoin a currency and asset class, asserting that it is “part of the commodity complex.”

Future of cryptocurrency according to El-Erian

On what the future holds for cryptocurrency, he thinks that cryptocurrency will become widespread. However, he insisted that digital currency will never displace fiat currency, but will become a part of the broader ecosystem.

Apparently people prefer cryptocurrency to fiat currency. El-Erian linked this preference to the global financial crises of the latter part to the year 2000. Explaining further, the former chairman of Global Development Council stated that people lost trust in fiat currency over the years. He maintained that cryptocurrency will never “disappear,” reiterating that it will find a place in the ecosystem.

Institutional interests in cryptocurrency

With New York Times’ columnist Andrew Ross Sorkin moderating the session, El-Erian had a lot of questions to answer. On his view of institutional interests joining the crypto bandwagon, El-Erian observed that lots of institutional interests exist.

He was also asked how possible this adoption is considering the substantial criticism of cryptocurrency by many entrepreneurs. Indeed, a typical example was billionaire investor Warren Buffet who called Bitcoin “rat poison squared” in May 2018.

In response, El-Erian noted that it was only natural to warn people when there is an unprecedented spike in the Bitcoin price. He maintained that such warnings were appreciated under the circumstance.

Earlier remarks

In November 2017, El-Erian granted an exclusive interview to CNBC. He argued that Bitcoin is not a currency due to the lack of certain attributes. The Allianz exec debated that currencies have to be predictable and stable to act as a medium of exchange.

He insisted that Bitcoin was far from such a classification as it is not stable yet. He told CNBC that Bitcoin acts more like a commodity than as a currency. In September 2017, when Bitcoin was ramping up at an alarming rate, El-Erian said that people are overvaluing the cryptocurrency. He observed that the surge of Bitcoin could give investors the wrong impression that governments will adopt it globally, warning that it would never happen.


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The post Allianz Chief El-Erian Makes a U-turn on Bitcoin Adoption by Ifeanyi Nwaokorie appeared first on BittPress – Cryptocurrency News, Bitcoin & Ethereum Blockchain News.