Bitcoin price could fall 40% to $10,000 in 2023, says Mark Mobius

Bitcoin could crash to $10,000, a drop of more than 40% from today’s prices, veteran investor Mark Mobius told CNBC on Thursday.

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

While Mobius expects bitcoin to hover around the current level of $17,000, the transition 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 overall 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 holding the coin does not pay interest,” Mobius said via email.

“Of course, there have been a number of offers of 5% or higher interest rates for crypto deposits, but many of those companies offering such rates have gone bankrupt in part as a result of FTX. So as these losses mount, people are afraid to hold crypto. coin to earn interest.”

There have been many companies offering investors sky-high interest rates to park crypto with them. Often these companies would rely on lending users’ crypto to others at really high interest rates, and then split the proceedings with the users. But when 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 a large exposure to the fallen exchange FTX.

Mobius also said that the boom in crypto was directly related to the Fed’s “printing machine working over time so that the USD money supply rose by 40% plus in recent years.”

“So there was plenty of money to speculate on cryptocurrencies,” Mobius added.

The Fed has kept interest rates ultra-low and engaged in quantitative easing over the past few years, which has been credited with helping the boom in areas of the market such as tech stocks and crypto. But the central bank has tightened monetary policy this year by sharply raising interest rates.

“Now that the Fed is withdrawing that cash, the ability for people to play the market becomes much more difficult,” Mobius said.

Mobius has been relatively successful with its 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 eventually go 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’ $10,000 call comes to fruition, it would add to a miserable few months for the cryptocurrency market, which has seen more than $1.3 trillion wiped off its value this year.