The total market cap of all cryptocurrencies is down 80% this year; bitcoin is down about 60%; ether is down 80% and hit a 52-week low on Wednesday; bitcoin cash is down 80%; XRP is down 88%.
But don’t send your condolences to the crypto community just yet.
“Crypto is not dead, and certainly the underlying technology is not dead,” said Allianz chief economic adviser Mohamed El-Erian, a widely respected voice in market analysis. “We’re going to see more widespread adoption, by both the private and public sector, of the blockchain technology and related technologies.”
That may sound like the oft-heard “blockchain, not bitcoin” mantra championed by Wall Street types like JPMorgan CEO Jamie Dimon and others who are wary of bitcoin, but intrigued by blockchain, the decentralized ledger technology that bitcoin runs on.
But El-Erian is not dismissing bitcoin, the digital asset itself. He said in June that bitcoin would be a good buy at $5,000, and reiterates that stance now: “For me, at $5,000, it’s reasonable.” The price of bitcoin fell to about $5,800 in late June, which remains its lowest point so far this year. It was at $6,314 on Wednesday afternoon.
“In terms of crypto, what we’re getting is the realization that adoption is not going to be as big and as quick as the proponents of crypto would like,” he says. “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 a lot of proponents would like it to be.”