Bitcoin, however, has not achieved the type of balance a currency have to possess, Allianz chief economic consultant Mohamed El-Erian noted, that he agrees with the perception that the digital currency is more of a commodity.
Mohamed El-Erian stated throughout the 2017 Barclays Asia forum in Singapore:
“A currency serves as a predictable store of cost, and serves as a medium of exchange this is very stable in value as bitcoins aren’t that there yet, they’re nevertheless searching for stability so it is more of a commodity than it’s a currency.”
Remaining month, Mohamed El-Erian mentioned that bitcoin’s cost should be half of the four thousand dollars it was fetching. Since then, the digital currency has surged beyond six thousand dollars, representing a rally of over five hundred percent these 12 months.
Digital currencies in general are becoming more interest from authorities and huge companies, with bitcoin seeing the most debate among commentators and regulators internationally. JPMorgan Chase chief executive Officer, Jamie Dimon, stated that bitcoin a fraud, even as billionaire Peter Thiel said people are underestimating it, noting it has fantastic capability.
Bitcoin lately acquired a nod from CME, the world’s biggest futures exchange, which announced this week that it plans to release bitcoin futures by the end of this year. However, Mohamed El-Erian remained skeptical. El-Erian noted that those buying into bitcoin could be assuming that establishments and central banks will extensively adopt it, but they might be incorrect.
Mohamed El-Erian stated:
“My main issue over the long term is: Is the idea within the pricing about adoption consistent with fact? It’s the problem that traders should ask if they are keeping bitcoins for several months.”