Allianz’s chief economic advisor, Mohamed El-Erian, says that the argument for investing in bitcoin has reached a pivot point. He sees more companies following Tesla’s example and embracing bitcoin as an investment vehicle as well as a form of payment.

Allianz’s Economic Advisor Says the Argument for Bitcoin Is Now Positive

Economist Mohamed El-Erian has highlighted key reasons for investing in bitcoin in an interview with CNBC last week. El-Erian, an Egyptian-American businessman, is President of Queens’ College, Cambridge University. He is also chief economic adviser at Allianz, the corporate parent of PIMCO, one of the largest investment managers, where he was CEO and co-chief investment officer.

“The argument for bitcoin is evolving. It used to be a negative argument,” the chief economic advisor described.

He elaborated that the reasons for investing in bitcoin used to be “You don’t trust the system, invest in bitcoin. You are afraid about inflation, about debasement, invest in bitcoin. Yields are too low on treasuries, put bitcoin in your ‘risk mitigation’ bucket.” El-Erian continued:

Now, suddenly, we have those reasons and Tesla says there are positive reasons: form of payment, investment vehicle. Now, that is the pivot.

He further asserted that Tesla showing the world that bitcoin can now be considered not only as an investment vehicle but also as a form of payment is why we saw the price of the cryptocurrency shooting up to an all-time high last week.

In a filing with the Securities and Exchange Commission (SEC), Tesla revealed that it purchased $1.5 billion worth of bitcoin in January. The company also said that it will soon accept BTC as a form of payment for its products.

El-Erian noted as “several private sector entities consider embracing bitcoin as a form of payment and investment, more officials warn against its risks.”

Responding to a question in an interview with CNN Monday about whether other companies will follow Tesla’s example and embrace bitcoin, El-Erian said, “I think you will see more companies do that.” He explained that it is “because they don’t know how else to mitigate risks, so it’s part of the distortion of the financial markets that we are seeing more generally.” A number of analysts also expect a flood of companies to follow Tesla’s move and get into bitcoin.