Allianz’s El-Erian Will Buy Bitcoin Again Only When Speculative Investors Leave the Market

Mohamed El-Erian – Chief Economic Advisor at Allianz – classified bitcoin investors into three different categories – “fundamentalists, professional investors, and speculators.” He said he would become a BTC holder once again only if the third type disappears from the space.

Will El-Erian Buy BTC Again?

The President of Queens College and CEA at Allianz – Mohamed El-Erian – revealed in a recent interview when he would potentially buy bitcoin again. It’s worth noting that he bought an undisclosed amount during the “crypto winter” of 2018, when the asset’s price stood at roughly $3,000.

“I felt compelled to buy it – I really did. I felt like I had framed it. I had this level, I had an entry point.”

However, at the end of last year, bitcoin skyrocketed to $19,000, and he decided to sell his position. In the following months, though, the primary cryptocurrency continued its rally, reaching an all-time high of around $69,000 just a few days ago.

Keeping in mind the significant price increase and the developments in the cryptocurrency industry, El-Erian revealed he could become a BTC owner once again but under one condition – if some of the day-trading “speculators” in the market get “shaken out.”

Apart from them, the BTC investors can also be “fundamentalists” – those who are in for the long run and professional investors looking to diversify their portfolios. These two types “are pretty solid in terms of supporting bitcoin and other cryptocurrencies,” he opined. They also understand the “underlying technology and model” and can be very “influential in the period ahead.”


Mohamed El-Erian
Mohamed El-Erian, Source: Twitter

Crypto Will Not Replace The Dollar

Allianz’s top executive further revealed that he sees digital assets as a “very disruptive force.” Michael Saylor – MicroStrategy’s CEO and one of the most passionate bitcoin supporters – also recently shared such thoughts.

However, El-Erian does not believe in bitcoin’s ability to replace the dominance of the US dollar, despite seeing its potential:

“I think it will always exist in the ecosystem, but it’s not going to be a global currency. It’s not going to replace the dollar.”

Regulations Need to Be Imposed

El-Erian urged cryptocurrency insiders to engage with regulators sooner rather than later to avoid problems that giant corporations like Amazon, Facebook, and Google experienced in their early days:

“When I speak to people in the crypto industry, I say you have a responsibility not to repeat the mistake of Big Tech. The big mistake of Big Tech was they didn’t realize they were becoming systemically important, so they didn’t engage in preemptive regulatory discussions.”

China may have banned the asset class, but it is still progressing to issue its own central bank digital currency and apply blockchain technology in some fields of its economy, El-Erian said. As such, he warned that the USA and other nations in the West should advance on the matter, or otherwise, China will dictate the rules:

“If the West is not careful, China will define standards for the world.”

Featured Image Courtesy of CentralBanking


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Traders watch for a trend reversal after Ethereum price drops to $4,100

Ether (ETH) traders might have a few reasons to panic after today’s 13% drop down to $4,100. The swift pullback appears to have broken a 55-day ascending channel that had a target at $5,500.

Ether/USD price at FTX. Source: TradingView

Those not worried about technical analysis will understand that the cryptocurrency’s 3.4% daily volatility justifies the 10% negative price swing. Still, one should not disregard externalities such as the United States infrastructure bill approval on Monday.

The legislation requires that digital asset transactions worth more than $10,000 are reported to the Internal Revenue Service. It remains unknown whether that will be applied to individuals and businesses developing blockchain technology and wallets.

Furthermore, on Nov. 12, the United States Securities and Exchange Commission officially denied VanEck’s spot Bitcoin exchange-traded fund application request. The regulator cited “fraudulent and manipulative acts and practices,” along with the lack of transparency on Tether’s (USDT) stablecoin.

Today’s liquidations were not significant

The unexpected ETH price move triggered $200 million worth of leveraged long futures contract liquidations but the open interest on Ether’s futures markets is still healthy.

ETH futures aggregate open interest. Source:

Notice how the current $11.9 billion still in place for perpetual and quarterly futures contracts is 37% higher from two months ago. However, the number of leverage longs (buy) and shorts (sell) are matched at all times in any derivatives contract.

Pro traders are no longer excessively optimistic

To determine whether professional traders are leaning bearish, one should start by analyzing the futures premium — also known as the basis rate. This indicator measures the price gap between futures contract prices and the regular spot market.

Ether’s quarterly futures are the preferred instruments of whales and arbitrage desks. Even though derivatives might seem complicated for retail traders due to their settlement date and price difference from spot markets, the most significant advantage is the lack of a fluctuating funding rate.

Ether three-month futures basis rate. Source:

The three-month futures typically trade with a 5% to 15% annualized premium, which is deemed an opportunity cost for arbitrage trading. By postponing settlement, sellers demand a higher price, and this causes the price difference.

Related: The power of cheap transactions: Can Solana’s growth outpace Ethereum?

As depicted above, Ether’s surge past $4,000 on Oct. 21 caused the basis rate to touch the 20% level, which marks some excessive leverage from buyers. After three weeks ranging between 14% and 20%, the indicator dropped to the current 12%.

Although the basis rate remains neutral-to-bullish, it signals that some buyers’ excess heat was terminated, which is essentially a healthy cleansing. Considering the drastic image portrayed by the ascending channel break, Ether traders should consider derivatives’ data as a brief cool off period.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.