Notable economist Mohamed El-Erian believes cryptocurrencies will remain relevant in the ecosystem of payments as long as they are properly regulated.
Mohamed Aly El-Erian, a prominent Egyptian-American businessman, and economist, has weighed in on the current state of the cryptocurrency scene amidst the prevalent bear market, expressing his confidence in the resilience of digital assets for an extended period of time.
“Crypto can and should survive as part of the ecosystem for payments, and as an asset class – speculative as it is – it just needs to be better regulated,” El-Erian remarked in an interview on a CNBC Squawk Box episode.
Despite his confidence in the resilience of cryptocurrencies, El-Erian does not believe the asset class would enjoy massive global adoption – at least not to the extent that most proponents are looking at.
“I do not think that Bitcoin is a global currency. I don’t think you can get massive adoption. When people say we’re going to a hundred, two hundred, three hundred thousand; they assume massive adoption. You’re not gonna get that,” El-Erian mentioned. He also noted that he is not certain if the cryptocurrency markets have found a bottom yet.
Furthermore, the cryptocurrency markets have recently sailed through the persistent economic turmoils better than traditional stocks and equities. When asked to air his opinion on the prevailing trend, El-Erian highlighted the early glorious period of cryptocurrencies and the attention it drew.
He further noted that the recent crash in the latest bear market was a classic feature of “most innovations.” Notwithstanding, El-Erian mentioned that the recent wave of reinforcements is expected and should be appreciated. These have contributed to the relative stability in the markets which he urges all crypto proponents to welcome.
“If you are a crypto fan, you should welcome the relative stability we’ve seen the last two months that has shaken out a lot of the excesses,” he said.
El-Erian remains an avid cryptocurrency proponent despite his conservative views on the asset class. Speaking on the recent underperformance of crypto assets in the bear market, the president of Queens’ College in June noted that the industry is currently in “round one” and would be staging a comeback before long.
In November of 2021, when bitcoin and the rest of the crypto market were witnessing a massive favorable atmosphere, El-Erian revealed that he purchased some bitcoin when the asset plummeted to $3,000 during the 2018 bear market. Nevertheless, he sold his holdings in late 2020 when BTC reclaimed the $19k price point.