Allianz’s chief economic advisor Mohamed El-Erian can be added to the growing list of notable investment and economic experts who aren’t bullish on bitcoin. The famed economist was a guest on CNBC’s “Squawk Box” segment Wednesday and explained that while bitcoin is certainly a “disruptive” technology, it’s current price is not reflective of its fair value.
Bitcoin’s current price assumes that the digital currency will experience “massive adoption,” but governments worldwide won’t “allow the amount of adoption that’s currently priced in,” he said. Nevertheless, there is a future for bitcoin in the form of peer-to-peer payments.
When prompted to suggest a fair value for bitcoin, El-Erian answered that bitcoin should be worth at least half or even one-third of its current value of just shy of $4,000. As such, the price of bitcoin is going to “blow up.”
El-Erian’s commentary on the digital currency doesn’t go quite as far as those expressed by JPMorgan Chase & Co. (NYSE: JPM)’s CEO Jamie Dimon. The bank executive thinks that bitcoin is a “fraud” and could blow up. Yet at the same time, he wouldn’t attempt to go short bitcoin because it is nearly impossible to determine the digital currency’s peak valuation.
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