Bitcoin Price Triple with True Value, Allianz Economist Claims

@xiti - Allianz economic adviser Mohamed El-Erian said that bitcoin prices have gone far beyond the true value of cryptocurrency.

The market contraction this month has prompted a new wave of bitcoin obituary articles. The most prominent came from JP Morgan CEO Jamie Dimon, who called the bitcoin a "cheating" and repeated the tired Tulipmania comparison. Just yesterday, the Wall Street Journal published an article claiming that bitcoin "may be zero."

The loss of the shuffle is a bearish forecast from economist Mohamed El-Erian. Allianz's advisers were far more bombastic than Dimon, but told CNBC the "Squawk Box" that bitcoin investors had prices in events that would never have materialized. El-Erian admits that bitcoin technology is a "disruptive" technology and states that he believes it will continue to exist as a tool for peer-to-peer transactions, but he told CNBC's host that he feels investors are too optimistic about long-term prospects . At the current bitcoin price, he says "consider [s] a massive adoption, which will not happen."

He doubled sentiment elsewhere in the segment, stating that the central bank will not let bitcoin be a threat to the inherited financial system. "Current prices assume massive adoption, and I do not think the government will allow the number of adoptions currently valued," he repeated. When pressed for a particular assessment, El Erian declares a fair bitcoin price to be one-half or one-third of the present value, generating about $ 1,300 to $ 2,000.

However, last week El-Erian stated that "emergency crypto will not disappear in the near future" during the annual precious metal dinner of the CME Group, according to a report from Kitco Metals. Although he thinks it is not a "gold substitute," he believes that the cryptoes will remain "part of the golden problem" and that the precious metal industry must "pay attention to what cryptocurrencies have done to your ecosystem."

"Do not underestimate when a small loyal customer base falls in love with another asset class," he added.