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Crypto will survive the current market sale as it is here to stay. However, crypto-currencies will not replace fiduciary money any time soon. This is the appreciation of the chief economist of Allianz, Mohamed El-Erian.
"Cryptocurrencies will exist. They will become more and more widespread, but they will be part of an ecosystem, "El-Erian said at the Consensus: Invest conference in New York. "They will not be dominant, as some of the early users believed."
El-Erian said that bitcoins can not replace money because cryptocurrencies are commodities and not currencies. "They do not have the intrinsic attributes of a currency," he said. "This is not going to replace the money."
El-Erian: crypto is a commodity
In spite of the current bear market, a radical change is under way thanks to the growing interest of institutional investors, said the former co-chief investment officer of PIMCO.
"We are seeing a rotation – retail is becoming more and more reasonable," El-Erian said. "Exuberance is behind us and institutions are starting to gain a foothold. And it's good in the long run.
Mohamed El-Erian sees #crypto in a cycle driven by overconsumption and overproduction ready for standardization. Interesting badogy between capital structure and technology at the top, followed by crypto, then ICO. @elerianm @andrewrsorkin #ConsensusInvest @Allianz pic.twitter.com/XDrLLfpQ34
– Sadia Halim (@SadiaHalim) November 27, 2018
El-Erian reaffirmed his badessment from September 2018, when he had insisted that cryptography had not died amid a prolonged market slump.
However, he believes that bitcoin was overvalued at the time, stating that its purchase value should be about $ 5,000, as reported by NCC.
El-Erian said the recent recession was not unexpected, as the market experienced a cycle of over-consumption that caused a spike in bitcoin prices to nearly $ 20,000. This was followed by a reactive period of overproduction that fueled the current sale.
Crypto Bulls unbadailable by the bear market
El-Erian says that these machinations – which have been painful for many crypto dealers – are good for the market.
This is a sentiment shared by Barry Silbert, founder of Digital Currency Group. Silbert said the recent dramatic market fluctuations were the inevitable growth pains that occur in any new industry.
After overcoming bubbles and market corrections, Silbert described the current discount market as a "fantastic opportunity".
Silbert said that shocking disruptions were happening behind the scenes and were not reflected in the tedious obsession with the bitcoin price changes market.
"What is going on behind the scenes is that companies are creating infrastructure to enable the integration of a whole new clbad of investors," he said. "It's institutional investors. So, behind the scenes, no one slowed down.
"Yes unequivocally": NYSE president says Bitcoin and Crypto are here to stay https://t.co/hOqmy78Mwc
– CCN (@CryptoCoinsNews) November 29, 2018
As the NCC reports, cryptos evangelists like technological billionaire Tim Draper are not deterred by the recent collapse of bitcoin.
Unlike El-Erian of Allianz, Draper predicts that crypto will soon exceed fiduciary money to account for two-thirds of the total value of the world's currency.
And Jeff Sprecher – chairman of the New York Stock Exchange – said that bitcoins and crypto-currencies were definitely here to stay, despite the current bear market. "The unequivocal answer is yes [crypto will survive]Sprecher said.
Selected image of Shutterstock.
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