Expert Remains Optimistic Despite Crypto Market Decline
Chief economist at the leading German insurance company Allianz, Mohamed El-Erian, believes that it is too early to give up on cryptocurrencies. The analyst expects a more widespread use of blockchain in both a private sector and state management of the national economy, Yahoo Finance reports.
In 2018, the cryptocurrency market has lost up to 80% of capitalization since the exchange rates of tokens witnessed a sharp correction. In particular, BTC lost 60% of its value, and ETH is going through a 52-week downward trend losing 80% of its maximum price. Nevertheless, the highly qualified market analyst remains optimistic about the present cryptocurrency situation.
“Crypto is not dead, and certainly the underlying technology is not dead,” the economist concluded. He added that the community can expect further extensive adoption of blockchain and related technologies.
However, El-Erian clarified that it will not happen as soon as crypto community would like. He is also reluctant to believe that cryptocurrency will become the currency that many supporters would like it to become, although it will play a certain role in the financial ecosystem.
Mohamed El-Erian, Chief economist at Allianz
Earlier, the Allianz economist called the $5,000 price of bitcoin reasonable, hence considering the purchase of the cryptocurrency at such rate as a good investment. Now bitcoin is priced at $6565, and in early September, there was a surge to $7700.
At the same time, despite the decline in the crypto market activities, the bitcoin dominance index reached a maximum in the current year — 56.3%. This indicator shows the level of popularity that the first cryptocurrency has among users.
Recently, the rate of the "silver analogue” of bitcoin has reached its annual low.