Bitcoin Price will stabilize at $5,000, Says Allianz Chief Economist

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DUBAI/UAE, 08NOV08 - Mohamed A. el Erian, Managing Director, Co-Chief Information, Officer, Pacific IINvestment Management Company, USA, at the Summit on the Global Agenda, 07 November - 09 November 2008. Copyright World Economic Forum (www.weforum.org)/Photo by Norbert Schiller

First, it is important to appreciate the fact that most financial experts and economist don’t openly comment about the price or value of cryptocurrencies such as bitcoin in public. However, that will soon change if the comments by Allianz chief economic, Mohamad El-Erian are anything to go by.

Cryptocurrency is here to Stay

Mohamad, who is currently working as the chief advisor of Allianz categorically, stated that cryptocurrencies are not going away any time soon even though some have dropped in value of the last couple of months. During the interview, he categorized bitcoin as an asset whose value is dependent on various market trends. He also went ahead to state that he expects the price to stabilize at $5,000.

During his interview with Yahoo Finance and noted by CCN, he also revealed that financial professionals are finally getting to understand and accept that adoption of cryptocurrencies will not as bit as they had earlier anticipated. However, cryptos will continue to dominate the financial industry for many years to come and will play a major role in the ecosystem.

Just like any other comment on cryptocurrency from a renowned financial analyst, the comments had a significant impact on the value of Bitcoin across all exchange platforms. The statements also came at the right time when the market is in robust bearish correction stage.

Views of Other Financial Experts

Before Mohammad comments, a number of financial experts had expressed their fears that the value of bitcoin would continue to drop if nothing was done to correct the trend. For instance, in June this year, the founder of London Fintech Week, Luis Carranza, said that bitcoin would stabilize at $2,500 before the end of 2018. Luis also went ahead to state that there is nothing that could prevent the value to drop to $2,500.

American Economist who is well known for his skeptical comments about bitcoin and cryptocurrency industry in general, Nouriel Roubini had initial stated that the value would drop even further, but this has so far been disapproved as evident from the current high value of not only bitcoin but also other currencies that he had predicted would suffer a dip this year such as Ethereum.

The motivation to sell not only bitcoin but also other digital currencies has become intense over the years mainly due to changes in the market. Unlike the popular belief, selling of bitcoin actually promotes the growth of the industry as evident from increase in value especially when there is high demand of this digital asset.

Closing Remarks

Just like any other new technology, there will be people who will support it while other will oppose it. Cryptocurrency has had a major impact in the industry and will continue to make significant changes in the financial industry for decades to come. The government just needs to accept that the technology poses no dangers on the economy and come up with a way of encourage citizens to invest more in it.

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