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El-Erian: I sold Bitcoin (BTC) too early

Tue 16 Nov 2021 ▪ 15h16 ▪ 3 min read — by Susan McCormack

Mohamed el-Erian, Chief Economic Advisor at the German insurance company Allianz, admitted to making a mistake of selling BTC at $19,000 mark.

Earning on BTC

In an interview with CNBC, Mohamed El-Erian said that he had purchased Bitcoin back in 2018 and sold it at the end of 2020, when its price reached the $19,000 mark. He admits to being too hasty, as in just a few months the BTC value mounted to $60,000. The economist blames his misjudgement on “behavioural mistakes”.

El-Erian categorises crypto investors into three groups:

– Fundamentals who invest into BTC for a long time 

– Professionals who purchase crypto to diversify their portfolios

– Speculators who make money on short-term investments

The economist believes the first two groups to eventually become “really strong foundations for the market long-term.” and notes that he is ready to buy Bitcoin again, but only when some speculators leave the market.

Financial system under BTC threat

Chief Economic Advisor at Allianz is sure that blockchain and cryptocurrencies can have a devastating impact on traditional financial systems. So far, he doesn’t see the possibility of turning BTC into a global reserve currency.

“I think it will always exist in the ecosystem but it’s not going to be a global currency. It’s not going to replace the dollar,” El-Erian said.

Crypto being systemically important, the economist recommends industry representatives to approach market regulation more seriously to avoid the Big Tech mistakes.

“The big mistake of Big Tech was they didn’t realise they were becoming systemically important, so they didn’t engage in pre-emptive regulatory discussions,” El-Erian explained.

China: blockchain leader?

El-Erian warned that China may try to get ahead of the US and the EU in the field of crypto and blockchain. Despite the fact that the world’s second-largest economy has banned cryptocurrency-related activities across the country, it sees potential in digital assets and has ambitious plans to issue its own digital currency.

In spring, el-Erian said that cryptocurrencies had taken such a strong position that an unexpected Bitcoin collapse could shake the entire global financial system.

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Susan McCormack avatar
Susan McCormack

How many crypto nerds does it take to fork an altcoin? I may be a failed comedian, but crypto is no joke! I want to share my knowledge and help others to see the bright future ahead. #buybitcoin

DISCLAIMER

The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.

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