When someone mentions the term “Cryptocurrency” your mind can’t help but immediately think of Bitcoin. After all, it is the most expensive and well-known currency. Taking just a quick look at the markets will show you that its popularity isn’t abating anytime soon.
However, according to Allianz Chief Economic Advisor, Mohamed El-Erian, the crypto world’s most famous currency is not even a currency, but rather a commodity.
“A currency serves as a predictable store of value, and serves as a medium of exchange that’s pretty stable in value as well. Bitcoins aren’t there yet, they’re still trying to find stability, so it’s more of a commodity than it’s a currency,”he explained to CNBC today during the 2017 Barclays Asia Forum being held in Singapore.
In addition, El-Erian had said just last month that the value of Bitcoin should actually be $2000 and not the $4000 that it was currently trading on. His comments seemed to have an adverse effect though as the currency is now trading at well past the $6000 mark.This shows a 500% growth in this year alone.
Even through most Cryptocurrencies are on the receiving end of attention from both large corporations and the government, Bitcoin still garners the most debate, both positive and negative. Peter Thiel, the billionaire who founded PayPal, has been quoted as saying that Bitcoin has “great potential” and that people are “underestimating it”. On the flip side of the proverbial coin,JPMorgan Chase CEO, Jamie Dimon, has labelled the currency a “fraud”.
Despite these comments, CME, which is the world’s largest futures exchange,has announced its plans to introduce Bitcoin futures by the end of this year. This move could open new doors in the development of Bitcoin ETFs, resulting in more investment opportunities for interested individuals.
However, El-Erian still isn’t convinced.
“My major concern over the long term is: Is the assumption in the pricing about adoption consistent with reality? That’s the issue that investors should ask if they’re holding Bitcoins for a couple of months,”he said.