Famed economist Mohamed El-Erian says he bought some bitcoin a few years ago — but misjudged when to sell due to "behavioral mistakes." The Allianz chief economic advisor revealed

he purchased an unspecified amount of bitcoin in the "crypto winter" of 2018, when the world's largest digital coin plunged close to $3,000 after a monster rally that took it

above $19,000 a year earlier. "I felt compelled to buy it — I really did," El-Erian said in an interview with CNBC's Dan Murphy on Monday. "I felt like I had framed it. I

had this level, I had an entry point." He subsequently held on to his position until late 2020, when bitcoin regained the $19,000 level. A few months later, bitcoin extended its wild

as key factors driving the rally. Meanwhile, bitcoin's underlying blockchain underwent a major upgrade over the weekend. Still, bitcoin and its smaller competitors — which include

ethereum and XRP — are notoriously volatile assets. Bitcoin at one point halved in price after initially topping $60,000 as Chinese regulators stepped up a crackdown on crypto mining and

trading. "You really don't want to ask me about valuations, because I don't quite understand why $60,000, as opposed to $68,000, is the right level," El-Erian added. WHEN

TO BUY AGAIN El-Erian categorizes bitcoin investors into three buckets: "fundamentalists" who are in it for the long haul, professional investors looking to diversify their

portfolios and day trading "speculators." The economist said he would only feel comfortable buying again once some of the speculators in the market are "shaken out." The

first two types of investors, he says, are "really strong foundations for that market long term." Mohamed El-Erian Olivia Michael | CNBC "These other two levels are pretty

solid in terms of supporting bitcoin and other cryptocurrencies," El-Erian said. "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." Like bitcoin's evangelists, El-Erian believes the cryptocurrency is a "very disruptive force." But he doesn't think it will

ever become a "global currency" rivaling the U.S. dollar. "I think it will always exist in the ecosystem but it's not going to be a global currency," he said.

"It's not going to replace the dollar." Unlike crypto skeptics, however, the former Pimco CEO doesn't believe bitcoin can be "regulated out of existence." > 

If the West is not careful, China will define standards for the > world. >  > Mohamed El-Erian > Chief Economic Advisor, Allianz As more and more mainstream investors jump into

the market, El-Erian thinks the crypto industry should start engaging with regulators sooner rather than later to avoid the regulatory headwinds facing internet giants like Amazon, Google

and Meta, the company formerly known as Facebook. "When I speak to people in the crypto industry, I say you have a responsibility not to repeat the mistake of Big Tech," El-Erian

said. "The big mistake of Big Tech was they didn't realize they were becoming systemically important, so they didn't engage in preemptive regulatory discussions."

"Crypto needs to take seriously that there are concerns about illicit payments; there's concerns about fraud; there's concerns about stability of platform," he added.

El-Erian warned China may look to get ahead of the U.S. and other countries in the West on digital currency and blockchain technology. While the world's second-largest economy has

largely banned cryptocurrency-related activities, it has ambitious plans to issue its own central bank digital currency and to apply the blockchain technology that underpins many

cryptocurrencies in other fields, such as intellectual property. "If the West is not careful, China will define standards for the world," El-Erian said.