Mohammed El-Erian, economic advisor at Allianz, predicts that the US monetary policy to control inflation levels will push the price of Bitcoin to new heights.
Mohammed El-Erian, economic advisor at Allianz Asset Management, the parent company of investment firm PIMCO, believes that the price of Bitcoin (BTC) will find new historical highs as the United States Federal Reserve (FED) continues its efforts to control inflation levels, with a limited probability of success.
In a interview On CNBC, El-Erian discussed the markets, the Fed's monetary policies, and the price of Bitcoin, noting that it could experience an exponential rise if the likelihood of a recession becomes a reality.
As Goldman Sachs predicts, the United States could enter a new recession in the next two years. The investment group said this week that there is a 35% probability of this happening. Therefore, based on these forecasts, the Allianz economics expert believes that cryptocurrencies could help investors and users as a diversifying element in the economy.
“In a time of inflation, it is attractive”, El-Erian said, referring to the fact that in times of inflation, investors move their money from traditional markets to others that offer better opportunities, such as cryptoassets.
Therefore, the current high inflation rates, the “lagging” position of the Federal Reserve in the financial system, and the difficult path to “orderly disinflation” will drive up the price of Bitcoin in the future.
El-Erian also noted that the elements that may favor Bitcoin and other cryptocurrencies will also have a positive impact on gold, which is approaching $2.000 an ounce.
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Bitcoin price could reach $100.000 USD in a year
Like El-Erian, Nexo CEO Antoni Trenchev believes that the Fed's monetary policies may end up benefiting the price of Bitcoin on the market. According to his current forecasts, the industry-leading cryptocurrency could reach and even exceed $100.000 per unit within the next 12 months.
Trenchev said CNBC said that while Bitcoin's price faces a potential short-term decline, a "crash" in stocks would boost the value of cryptocurrencies by a long shot.
In January 2020, Nexo’s CEO predicted that the price of Bitcoin would reach $50.000 per unit that same year. “Everyone was laughing at me”, he noted. However, although Bitcoin closed 2020 at around $30.000 per unit, two months later, in February 2021, it reached a unit value of $50.000.
Bitcoin hit a new all-time high (ATH) price of $67.145 per unit last November. At press time, the cryptocurrency is trading at around $41.000 per BTC.
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