Allianzâ€™s chief economic advisor, Mohamed El-Erian, says that the argument for investing in bitcoin has reached a pivot point. He sees more companies following Teslaâ€™s example and embracing bitcoin as an investment vehicle as well as a form of payment.
Allianzâ€™s Economic Advisor Says the Argument for Bitcoin Is Now Positive
Economist Mohamed El-Erian has highlighted key reasons for investing in bitcoin in an interview with CNBC last week. El-Erian, an Egyptian-American businessman, is President of Queensâ€™ College, Cambridge University. He is also chief economic adviser at Allianz, the corporate parent of PIMCO, one of the largest investment managers, where he was CEO and co-chief investment officer.
â€œThe argument for bitcoin is evolving. It used to be a negative argument,â€ the chief economic advisor described.
He elaborated that the reasons for investing in bitcoin used to be â€œYou donâ€™t trust the system, invest in bitcoin. You are afraid about inflation, about debasement, invest in bitcoin. Yields are too low on treasuries, put bitcoin in your â€˜risk mitigationâ€™ bucket.â€ El-Erian continued:
He further asserted that Tesla showing the world that bitcoin can now be considered not only as an investment vehicle but also as a form of payment is why we saw the price of the cryptocurrency shooting up to an all-time high last week.
In a filing with the Securities and Exchange Commission (SEC), Tesla revealed that it purchased $1.5 billion worth of bitcoin in January. The company also said that it will soon accept BTC as a form of payment for its products.
El-Erian noted as â€œseveral private sector entities consider embracing bitcoin as a form of payment and investment, more officials warn against its risks.â€
Responding to a question in an interview with CNN Monday about whether other companies will follow Teslaâ€™s example and embrace bitcoin, El-Erian said, â€œI think you will see more companies do that.â€ He explained that it is â€œbecause they donâ€™t know how else to mitigate risks, so itâ€™s part of the distortion of the financial markets that we are seeing more generally.â€ A number of analysts also expect a flood of companies to follow Teslaâ€™s move and get into bitcoin.
Do you agree with the Allianz economic advisor? Let us know in the comments section below.
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