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Allianz Chief Economic Adviser, Germany: Smart Investors If bitter bitcoin prices corrections, Bitcoin will collapse

While bitcoin prices have picked up and regained the lost half of what they lost last Friday, one commenter said the Bitcoin market has reached a crucial moment.
After the price of Bitcoin fell 45% on Dec. 22 - down to $ 10,800, virtually all other cryptocurrencies have also plummeted, but bitcoin prices have now rebounded to some extent. Meanwhile, Mohamed El-Erian, Allianz's chief economic adviser and former chief executive of Pimco, asked whether the bitcoin market has reached the end of its life or death.

On December 26, in the column "Bloomberg Opinion," El-Erian wrote:

"This drastic price correction will either be a catalyst for expanding institutional participation that so far has been limited in this market or setting the tone for an extraordinary historic asset bubble.
El-Erian had previously called bitcoin more like a commodity than a currency because its price was too volatile to be used as a medium of exchange. He acknowledged bitcoin's major milestone this year under the bed: the price soared, the exchange futures market was open, and government intervention was limited.

However, he sees a potential weakness with bitcoin: in his words, those who hold long positions are less sophisticated retail investors, and those who are short positions are experienced people. At the same time, institutional investors overwhelmingly did not participate in the market.

In other words, as prices fall, there may be some changes that could mark a gradual withdrawal of the less attractive, irrational boom. He wrote:

"Just after bitcoin has experienced one of its not-so-big history of roller coasters, the most important issue Bitcoin faces is that recent price corrections will prove whether it is" healthy "as market participants call it."
To justify themselves, bitcoin investors need to become more diversified, while experienced investors also have to join long-held retail investors, and institutional investors also need to join the market. This price correction will also need to generate what El-Erian calls "market-deepening products."

If Bitcoin can not grow in this way, he writes that retail investors will face "a price appreciation and a crash, perhaps the largest in the history of investment bubbles."