"A currency serves as a predictable store of value, and serves as a medium of exchange that's pretty stable in value as well — bitcoins aren't that there yet, they're still trying to find stability so it's more of a commodity than it's a currency," he told CNBC on Thursday during the 2017 Barclays Asia Forum in Singapore .

Bitcoin , despite the large amount of interest it has attracted, has not achieved the kind of stability a currency should possess, Allianz Chief Economic Advisor Mohamed El-Erian said, adding that he agrees with the notion that the cryptocurrency is more of a commodity.

Last month, El-Erian said bitcoin's value should be half of the $4,000 it was fetching. Since then, the cryptocurrency has surged past $6,000, representing a rally of over 500 percent this year.

Cryptocurrencies in general are from government and large organizations, with bitcoin seeing the most debate among commentators and regulators across the world. JPMorgan Chase CEO Jamie Dimon called bitcoin a "fraud," while billionaire Peter Thiel said people are "underestimating" it, saying it has "great potential."

Bitcoin recently received a nod from CME, the world's largest futures exchange, which announced this week that it plans to launch bitcoin futures by the end of this year.

But El-Erian remained skeptical. He said those buying into bitcoin may be assuming that it will be widely adopted by institutions and central banks, but they could be wrong.

"My major concern over the long term is: Is the assumption in the pricing about adoption consistent with reality? That's the issue that investors should ask if they're holding bitcoins for a couple of months," he said.

— CNBC's Arjun Kharpal contributed to this report.