Mark Mobius, the co-founder of Mobius Capital Partners and an American-German investor, feels there is still potential for the cryptocurrency market to collapse.
In an interview with Bloomberg, the co-founder of Mobius Capital Partners LLP forecasted that the price of Bitcoin will drop to $10,000. "It's very dangerous," he warned, adding that he would never stake his own or his clients' capital in digital assets.
"But crypto is going to survive because there are some investors who still believe in it," said Mobius, who spent well over three decades at Franklin Templeton Investments. "It's astonishing how Bitcoin values have stayed up" despite the FTX catastrophe, he stated. The dramatic collapse of Sam Bankman Fried's exchange FTX and sibling trading business Alameda Research has put a fog over the digital-asset industry. But the concern is that the virus may propagate and knock down other crypto firms.
Some cryptocurrency analysts are predicting a pullback to $10,000, which would bring Bitcoin to values last seen in 2020 before the token's bull run to a peak of over $69,000 by November last year. Deribit options statistics reveal a large quantity of outstanding Bitcoin put contracts – so-called open interest – at a strike price of $10,000 for an end-of-December expiration. The concentration of options trades indicates that derivative investors believe that level could be tested.
Bitcoin was trading at around $16,200 as of 7:10 a.m. in London, down as much as 3.2% on Monday due to a gloomy tone in global markets. Losses were also reported in digital assets ranging from Ethereum to the meme token Dogecoin. This year, a measure of the top 100 coins has lost nearly 65% of its value.
Mobius isn't the only one who despises cryptocurrency, JPMorgan, Chase CEO Jamie Dimon has also slammed bitcoin recently, calling it "worthless" and "fool's gold. On the other hand, Billionaire investor Paul Tudor Jones feels cryptocurrencies have a future and are a stronger hedge against inflation than even gold.
Long-time crypto cynic
Mobius, a long-time cynic of cryptocurrency, has previously referred to it as a "religion" rather than an investment. He has also cautioned that problems in the cryptocurrency sector could extend to the broader financial market, taking the US stock market down with them.
Nonetheless, Mobius has previously expressed support for bitcoin. In 2019, he stated that bitcoin, like all currencies, is founded on trust and that he may purchase it if adoption increases.
Mobius, a foreign market expert who worked for Franklin Templeton before going solo, says stocks are the best bet due to currency and inflation considerations.
"Stocks are clearly the answer since currency depreciation is not going away, which implies inflation will continue at a high rate in the future," he said. "Don't forget that the US money supply has increased by more than 30%”. With so much liquidity floating about as a result of easy Covid-era central bank monetary policy, Mobius said in September that much of it would eventually up back in stocks.
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