CRYPTOCURRENCIES LATEST NEWS: Economist Allianz: bitcoin on the threshold of the "moment of truth"

The chief economist of the largest European asset management company Allianz, Mohamed El-Erian, is sure that in the near future a "moment of truth" will come for bitcoin. The financier associates this with the correction that the first cryptocurrency tested recently after the launch of BTC futures. He expressed his point of view in the author's column on Bloomberg.

According to El-Erian, now the crypto-currency market is at the "historical crossroads": 2017 was a breakthrough for the industry, and the price of bitcoin increased from $ 1,000 to almost $ 20,000, after which a noticeable correction began. So, at the time of publication, the weighted average rate of BTC, according to Coinmarketcap, is about $ 14,450 - well below the historical record of $ 20,089, set December 17.

Although bitterness is common in bitcoin (the average coin is down by 30% every two months), El-Erian noted that this was the biggest correction after the launch of BTC futures on US stock exchanges CBOE and CME Group.

"This sharp correction will either become a catalyst and will further stimulate the interest of institutional traders in the new market, or it will become a stepping stone to blowing this historic and outstanding bubble," El-Erian said.

In September, the former executive director of PIMCO called a "reasonable" price of $ 1,300-2,000 per bitcoin (about a third of the real market at that time), arguing that the cryptocurrency is held on a dedicated but limited investor base. Then the financier also noted that bitcoin attracted far less government attention and intervention than expected.

Financial analysts also said that the regulatory measures of the Chinese government would be a "mortal blow" for bitcoin. As practice showed, cryptocurrencies continued to grow in price and after all prohibitions in the Middle Kingdom.

El-Erian believes that a "healthy" correction will eliminate "irrational exuberance", and will also provide institutional investors with an attractive "entry point" to the crypto-currency market.

"Without this, even the most dedicated supporters will not be enough to protect individual private investors who may eventually face the fact that the biggest financial bubble in history will burst," El-Erian summed up.

Recall, according to the company Convoy Investments, bitcoin has become the largest financial bubble in the history of mankind , having overtaken this year even the "tulip" of the XVII century.