- Revered economist Mohammed El-Erian bought BTC at $3,000 but he sold it way too early, blaming this on a behavioral mistake.
- He would be open to buying BTC again, but he has one condition that he insists must be met before he considers diving in again.
One of the world’s most revered economists has owned Bitcoin, but he missed out on incredible gains due to one behavioral mistake. Mohammed El-Erian bought BTC at $3,000 and a few months later it shot up, and so he sold. If he had held on, he’d have made 2,000 percent in gains.
El-Erian is an Eqyptian-American economist who has held several influential roles in the global financial space. He is currently the chief economic advisor for German insurance giant Allianz. He has served as the CEO of PIMCO, an American investment giant with over $2.2 trillion under management as well as chairing President Obama’s Global Development Council.
In a recent interview, he revealed that two years ago, he purchased some BTC. This was after the cryptocurrency dropped from about $20,000 in December 2017 to just above $3,000. Having claimed that this was the most ideal entry point into BTC, he decided to take the leap himself.
A few months later, his bet had paid off and BTC was on its way to $20,000 again. Before it hit this landmark, he sold his stash. He blames his rush to sell his Bitcoin on a behavioral mistake many investors make by making arbitrary conclusions about what the top is for an asset.
He regretted selling his BTC as a few months later, he saw the value of Bitcoin shoot up to over $50,000. It has since then soared to a new all-time high above $68,000. At press time, BTC is trading just above $60,000 after losing 8.5 percent in the past 24 hours.
Also Read: Bitcoin is in a tug of war between the private and public sectors: Top global economist
The best time to get back into Bitcoin
El-Erian noted that there are three levels of people in Bitcoin. The first is the fundamentalists who believe Bitcoin will become a global currency. This group is unswayed by any current events and will hodl BTC right to the end.
The second group is the asset managers who look at Bitcoin as a diversifier. This group typically puts in 1-5 percent of their money into Bitcoin and is also not in a rush to sell and make some quick bucks.
The two groups are what has kept Bitcoin strong over the years, the economist believes. He added:
These other two levels are pretty solid in terms of supporting bitcoin and other cryptocurrencies. The key thing here is the underlying technology and the model. And those two things are going to be very influential in the period ahead.
Then there’s a third group of speculators and day traders. This is the group that’s responsible for the wild volatility that has come to define Bitcoin. They want to make big gains quickly and then exit the market. Should Bitcoin take a hit, this group of holders will rush to dump it to protect their money.
For El-Erian, who is also a best-selling author, the only time he would consider jumping back into BTC is when the speculators are shaken out.