header banner

According to Mark Mobius, bitcoin could plummet by 40% to $10,000 in the upcoming year

Table of Contents

    Mark Mobius, founding partner of Mobius Capital Partners.

    Paul Morris | Bloomberg | Getty Images

    Bitcoin could crash to $10,000, a more than 40% plunge from current prices, veteran investor Mark Mobius told CNBC on Thursday.

    The co-founder of Mobius Capital Partners, who correctly called the drop to $20,000 this year, said that bitcoin is "not far away" from $10,000 now that it has broken the technical support levels of $18,000 and $17,000.

    While Mobius expects bitcoin to hover around its current $17,000 level, the move to $10,000 could happen in 2023, he said.

    The investor, who made his name at Franklin Templeton Investments, told CNBC that his bear case for bitcoin stemmed from rising interest rates and general tighter monetary policy from the U.S. Federal Reserve.

    "With higher interest rates, the attraction of holding or buying Bitcoin or other cryptocurrencies becomes less attractive since just holding the coin does not pay interest," Mobius said via email.

    "Of course there have been a number of offerings of 5% or higher interest rates for crypto deposits but many of those companies offering such rates have gone bust partly as a result of FTX. So as those losses mount people become scared of holding the crypto coin in order to earn interest."

    There have been numerous companies offering investors sky-high interest rates for parking their crypto with them. Often, these companies would rely on lending users' crypto out to others at really high interest rates, then splitting the proceedings with users. But as crypto prices crashed and liquidity dried up earlier this year, many of these companies collapsed.

    One such company is Celsius which filed for bankruptcy in July. Another is BlockFi, which had large exposure to the fallen exchange FTX.

    Watch CNBC's full interview with Mobius Capital's Mark Mobius

    Mobius also said the boom in crypto was directly related to the Fed's "printing machine working over time 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," Mobius added.

    The Fed has had ultra-low interest rates and engaged in quantitative easing over the past few years which has been credited with helping the boom in areas of the market like technology stocks and crypto. But the central bank has been tightening its monetary policy this year by raising interest rates sharply.

    "Now as the Fed is drawing back that cash the ability for people to play in the market becomes much more difficult," Mobius said.

    Mobius has been relatively successful with his bitcoin calls this year. In May, when the price of bitcoin was above $28,000, he told Financial News that bitcoin would likely fall to $20,000, then bounce, but ultimately move down to $10,000.

    While the $10,000 mark has not been reached, bitcoin has fallen as low as $15,480 this year.

    If Mobius's $10,000 call materializes, it will add to a miserable few months for the cryptocurrency market which has seen more than $1.3 trillion wiped off of its value this year.

    Can ethereum topple bitcoin as the crypto king?


    Article information

    Author: Maria Walters

    Last Updated: 1704331921

    Views: 1649

    Rating: 3.7 / 5 (119 voted)

    Reviews: 89% of readers found this page helpful

    Author information

    Name: Maria Walters

    Birthday: 1930-09-15

    Address: 9746 Nathan Avenue, New Hectorburgh, MA 89724

    Phone: +4034742184795160

    Job: Tour Guide

    Hobby: Scuba Diving, Juggling, Basketball, DIY Electronics, Painting, Coin Collecting, Cooking

    Introduction: My name is Maria Walters, I am a Determined, striking, unguarded, valuable, lively, unwavering, frank person who loves writing and wants to share my knowledge and understanding with you.