Allianz: Now is the Time to Buy Bitcoin

| Publish date: 06/30/2018
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The last few days have been called a “bloodbath” for the crypto market, with almost all the cryptocurrencies falling steeply in value. Yesterday, Bitcoin dropped once again below the $6,000 mark, thereby once again giving rise to speculation that cryptocurrencies were definitely one of the biggest bubbles in history.

Is This the End?

Mainstream news agencies reported that the world’s most valuable cryptocurrency has already lost 70% of its value since its December 2017 high, and Bitcoin’s fall is now again being compared to the dot-com bust. According to statistics, the dot-com bubble burst as it plunged 78% from its peak on the Nasdaq Composite Index back in 1995.

Furthermore, mainstream media reports that the small-cap cryptos have been hardest hit, with Dead Coins listing about 800 cryptos whose values have dropped to zero. Coinopsy, on the other hand, has stated that more than 1,000 small cap tokens have been destroyed in this market slump.

According to the Nobel Laureate who predicted the dot-com crash, Robert Shiller, while Bitcoin may not drop down to zero, it is still very much a bubble that is going to burst.

Now is the Time to Buy

The Chief Economic Advisor of Allianz, the financial services company, Mohamed El-Erian, on the other hand, has a diametrically opposing view. According to him, this is the time to buy Bitcoin. In fact, he said that if the value of BTC drops to $5,000, then he himself was going to buy the cryptocurrency.

El-Erian said that the 2017 price surge in Bitcoin was just pure speculation that had been fueled by the Fear Of Missing Out (FOMO). However, he said that while BTC may not reach $20,000 again, he believes that there is a future for cryptocurrencies, just not in the form that they are in today.

According to El-Erian, the cryptocurrency market will still be there 10 to 15 years down the line, however there will also be a lot of involvement from the public sector and Bitcoin will not be traded as a currency. Rather, the world’s most valuable cryptocurrency would become a store of value – like gold – and will be traded as such.

According to the executive, cryptocurrency adoption rates are going to be much slower than proponents hope, simply because the government is going to intervene to prevent mass speculation the way it took place last year.

At the end of the day, El-Erian believes that while the form of the cryptocurrency may change over the next few years, it is not a bubble and the underlying technology is something that needs to be taken very seriously.

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