Mark Mobius has a message Bitcoin enthusiasts might not want to hear. After correctly predicting in May the cryptocurrency’s drop to $20,000, the billionaire co-founder of Mobius Capital Partners now says Bitcoin will fall to $10,000 sometime next year, which would be more than 40% below its current level of about $17,000 and 85% below its peak near $69,000 in November 2021.
With the Federal reserve hiking interest rates and tightening its monetary policy, he told CBNC on Thursday, holding or buying cryptocurrencies becomes less attractive.
Exchanges have offered interest rates for crypto deposits, but some have gone bust partly due to the sudden collapse of FTX last month. That’s scared investors from holding digital currencies to earn interest, Mobius said.
One such company is BlockFi, a cryptocurrency lender and financial services firm that filed for bankruptcy this week. The company said it had “significant exposure” to FTX and “like the rest of the world, found out about [the] situation through Twitter.”
Mobius also pointed to the Fed to explain the earlier boom in crypto, telling CNBC the central bank’s printing machine was “working overtime so that money supply in USD rose by 40% plus in the last few years. So there was abundant cash to speculate on crypto coin.”
“Now, as the Fed is drawing back that cash, the ability for people to play in the market becomes much more difficult,” he added.
Crypto investing 'too dangerous'
The long-time crypto skeptic made similar comments this past weekend while talking to Bloomberg, calling the crypto sector “too dangerous” for himself or for investing on behalf of his clients.
Mobius isn’t alone in the crypto skepticism. While Ark Invest founder Cathie Wood thinks the price of Bitcoin could hit $1 million by 2030, JPMorgan Chase CEO Jamie Dimon in October called cryptocurrencies “worthless” and “fool’s gold.”
Meanwhile, Warren Buffett’s right-hand man Charlie Munger said earlier this year that anyone who sells crypto is either “delusional or evil.”
Last month, after the FTX collapse, he added, “The country did not need a currency that was good for kidnappers…There are people who think they’ve got to be on every deal that’s hot. They don’t care whether it’s child prostitution or Bitcoin. If it’s hot they want to be on it. I think that’s totally crazy.”
Mobius said early last month on CNBC: "The Bitcoin situation and the cryptocurrency situation is religion. It's not an investment, it's a religion. People believe in it. People think they're getting richer, and that's fine. As long as the music continues to play, it's great. Once that music stops, then we're going to be in real trouble."
