2021-2-9 20:22 |
Now that Bitcoin has hit a new all-time high above $48,000, the market is eager to know if it is at the top of this bull cycle.
At least, CNBC host wants to know that, and Mohamed El-Erian, an economic advisor at Allianz and Gramercy, has made it very clear that though a bubble, it is a “rational” bubble.
When asked about Bitcoin’s uptrend putting it back into “over-stretch overbought” levels, El-Erian pointed that as he has said it “repeatedly for the last many many months, the path of this resistance for this money is up, don't get in the way of massive liquidity.”
According to him, the only thing that will stop this mania in the Bitcoin market is either a market accident” or the Fed losing control of yields on longer-dated bonds.
“It is a bubble, prices are completely disconnected from fundamentals, but it is rational because there's so much liquidity being pumped in.”
Only Lead to More MomentumWith over a $10,000 move up following Tesla announcing that it has bought $1.5 billion worth of bitcoin for “more flexibility to further diversify and maximize returns on our cash,” this is going to lead to more momentum, as per El-Erian.
“It will continue to build momentum,” was El-Erian’s clear answer to if it is the top.
This is because “what did tesla tell you two things one is that this will be a form of payment and two is that this is an investment vehicle, so those are two powerful endorsements for the notion, I want to stress the notion that bitcoins are a currency – money,” said El-Erian, and president at Queens College, Cambridge, Monday on CNBC’s “Squawk Box.”
And because money is a store of value and a form of payment, “that will build further momentum,” he added.
Although the reaction to Tesla’s diversification into Bitcoin is going to be all over the place, with some seeing it as visionary while others will want to invest in Bitcoin directly, for bitcoin holders today is good news for them, he said.
For El-Erian, it further means, “argument for bitcoins is evolving,” which is “consequential.”
As we have seen throughout 2020, Bitcoin has been the answer to someone who doesn’t trust the system, is afraid about inflation and the fiat basement, and is looking for an alternative asset because yields are too low on treasuries.
All of these arguments, according to El-Erian, have been negative, but “now suddenly” Tesla has given positive reasons in the form of payment and investment vehicles.
Bitcoin/USD BTCUSD 46,665.5563 $2,762.60 5.92% Volume 98.64 b Change $2,762.60 Open$46,665.5563 Circulating 18.62 m Market Cap 869.11 b baseUrl = "https://widgets.cryptocompare.com/"; var scripts = document.getElementsByTagName("script"); var embedder = scripts[scripts.length - 1]; var cccTheme = {"Chart": {"fillColor": "rgba(248,155,35,0.2)", "borderColor": "#F89B23"}}; (function () { var appName = encodeURIComponent(window.location.hostname); if (appName == "") { appName = "local"; } var s = document.createElement("script"); s.type = "text/javascript"; s.async = true; var theUrl = baseUrl + 'serve/v1/coin/chart?fsym=BTC&tsym=USD'; s.src = theUrl + (theUrl.indexOf("?") >= 0 ? "&" : "?") + "app=" + appName; embedder.parentNode.appendChild(s); })(); var single_widget_subscription = single_widget_subscription || []; single_widget_subscription.push("5~CCCAGG~BTC~USD"); The post It’s Not a Top, Bitcoin in a “Rational Bubble” says Allianz Economic Advisor first appeared on BitcoinExchangeGuide.Similar to Notcoin - TapSwap on Solana Airdrops In 2024
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