The market capitalisation of all cryptocurrencies has shrunk from an all-time high of $831 billion in early January to about $186 billion currently, but “crypto is not dead”, assures Allianz Chief Economist Mohamed El-Erian.
“Certainly the underlying technology is also not dead,” he says in an interview with Yahoo Finance. In fact, “I think it’s going to be there, it’s going to last for a long time, it’s going to play a role in the ecosystem, but it’s not going to be the currency that many proponents would like it to be”.
He emphasises: “In terms of crypto, what we’re getting is the realisation that adoption is not going to be as big and as quick as the proponents of crypto would like.”
The cryptocurrency market has been bearish for the greater part of this year. The market cap of crypto has lost about 80% of its value in 2018. This last week alone, the market has lost $100 billion of its value.
The massive drop has now gone below the Nasdaq Composite Index’s 78% decline after the dot-com bubble burst in 2000. “It just shows what a massive, speculative bubble the whole crypto thing was – as many of us at the time warned,” says Markets.com’s London Chief Market Analyst Neil Wilson. “It’s a very likely a winner takes all market – Bitcoin currently most likely.”
Bitcoin holds and cryptos back in the green
Among the hundreds of cryptocurrencies, Bitcoin, the largest by market volume, has been one of the only ones to show some level of stability within a highly volatile market hovering just over the $6,400s. In August it dipped to under $5,500. Ethereum had been on a losing streak until the last few hours during which it has recovered about 6% to $188.45. All other top cryptocurrencies are in the green as of 13th September.
In June, El-Erian said Bitcoin would be a good investment at $5,000. Today, he’s still not dismissing BTC but insists $5,000 is reasonable.
Blockchain is another story
For El-Erian as well as all other experts, blockchain is a whole other subject.
“We’re going to see more widespread adoption, by both the private and public sector, of blockchain technology and related technologies,” he states.
Other crypto analysts, such as EF Hutton’s Director of Research for Digital Assets Christopher Daniels, agree that cryptocurrency is here to stay and will become mainstream in about two years.
Binance CEO Chang Peng Zhao believes the crypto market will turn around and grow exponentially once again.
Agreeing with Zhao, Tron Founder Justin Sun predicts that, “the entire world wealth will turn into cryptocurrencies like a blackhole and grow much bigger in the future. Cryptocurrency will hit the $10 trillion market cap before Apple and Amazon do”.