While Bitcoin (BTC) has fallen due to the US-China conflict, gold is on the rise. Gold rose 3.2% in the spot market overnight to a record high of $4,380 an ounce.
Legendary economist Mohamed El-Erian, Allianz Chief Economic Advisor, has made new comments about Bitcoin and gold as gold continues to break records amid uncertainty surrounding the US government shutdown and China trade tensions.
Announcing year-end gold predictions!
Mohamed El-Erian spoke about the similarities and potential risks between Bitcoin and gold in an interview with CNBC.
The economist said that although the world has confidence in American companies, it is concerned about the future of the dollar, a situation that has caused gold to buy and rise.
El-Erian attributed the rally in the gold market to concerns about the dollar.
“Investors are currently long US assets and short the dollar.
As a result, central banks are gradually starting to move dollar reserves into gold. At the same time, institutional investors are increasing the proportion of gold in their portfolios.
At the moment, the two main factors driving gold prices are the increasing weight of gold in the portfolios of central banks and institutional investors.
“And this gold accumulation will continue. At this point, I wouldn’t be surprised if gold reaches $5,000 this year.”
Bitcoin has a long way to go to reach the gold level!
While El-Erian defines the bottom of the investment pyramid as central banks, the middle as institutional investors, and the top as speculators, he said he sees Bitcoin as still in its development stage.
El-Erian said Bitcoin is still largely speculative and its underlying investment base is still weak.
The economist said that Bitcoin’s perfect balance has not yet been established, and that while the speculative side is large, the institutional and fundamental investor side is still small.
El-Erian described Bitcoin as a cousin of gold, saying:
“Bitcoin is similar to gold as a store of value, but speculative elements still predominate. Bitcoin has a limited institutional investor base, resulting in high volatility.”
“However, over time, BTC will emerge with a strong ecosystem and acquire gold-like properties. But for now, it will take time for Bitcoin to reach gold-like properties.”
*This is not investment advice.
