Allianz’s acclaimed Chief Advisor on Economics, Mohamed El-Erian is raising doubts over the argument suggesting Bitcoin will going to replace USD and become a global currency. While rejecting the idea of Bitcoin replacing USD, he, however, acknowledged the fact that there is no way that virtual currencies can be thrown out of the world’s financial ecosystem, and instead virtual currencies will continue to exist whether or not the regulations are provided.
There is an argument that is being advocated by many acclaimed economists of the world. The idea is that in a matter of time Bitcoin, which is a digital currency, will going to snatch US Dollar’s integrity by replacing it inevitably. In simple wordings, the idea propagates that Bitcoin will become the world’s currency. Mohamed El-Erian is an acclaimed economist working with an internationally recognized financial firm called, “Allianz”, as its Chief Advisor on Economics. According to El-Erian, however, the idea of Bitcoin replacing USD or that USD will lose its integrity is rubbish and absurd.
El-Erian was talking to CNBC where he gave his own idea of Bitcoin and where he sees Bitcoin in the future. What El-Erian suggested in the first place was denying the argument that Bitcoin will ever become the world’s currency. He opined that undoubtedly Bitcoin has immense potential of causing disruption and in fact has been causing disruption right now. However, USD is a strong rival that has global confidence because USD has been tested time and again. On the contrary, Bitcoin is a private currency and even those who are possessing it do not pose their confidence and trust in it. This is true because Bitcoin is too much volatile and people cannot determine on which side this volatility will turn.
The economist however acknowledged and endorsed the fact that there is no way anyone can pick Bitcoin out of the mainstream financial system. As a matter of fact, Bitcoin and an entire lot of cryptocurrencies have deep-rooted their strong influence on the world’s financial system. El-Erian is of the view that whether or not the regulation is provided, the crypto economy will continue to exist.
He further informed that in mid-2018, he had bought a few Bitcoins for himself. At that time, the purchase cost him less than US$ 3,000 per Bitcoin. But he did not mention the fact as to how much Bitcoins were bought or what amount of money he invested therein. He told however that it was the time when Bitcoin attracted him into investment and he is glad that he did so. He then told that he kept his coins until 2020 when Bitcoin’s value transitioned into the US$ 19k threshold. But he misjudged and decided to let go of his Bitcoins for which he regrets his decision.