CNBC: Mark Mobius says bitcoin could crash 40% to US$10,000 next year

CNBC: Mark Mobius says bitcoin could crash 40% to US$10,000 next year
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KUALA LUMPUR (Dec 2): Bitcoin could crash to US$10,000, a more than 40% plunge from current prices, according to veteran investor Mark Mobius.

In an interview published on Thursday (Dec 1), CNBC quoted the co-founder of Mobius Capital Partners, who correctly called the drop to US$20,000 this year, saying that bitcoin is “not far away” from US$10,000 now that it has broken the technical support levels of US$18,000 and US$17,000.

The report said that while Mobius expects bitcoin to hover around its current US$17,000 level, the move to US$10,000 could happen in 2023.

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 US 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,” said Mobius.

“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,” he said.

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.

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