According to Mark Mobius, the price of bitcoin could drop by 40% to $10,000 in the following year.
According to seasoned investor Mark Mobius, Bitcoin could plunge to $10,000, a 40% drop from its current price.
Having breached the technical support levels of $18,000 and $17,000, the co-founder of Mobius Capital Partners, who correctly predicted the decline to $20,000 this year, claimed that bitcoin is "not far away" from $10,000 at this point.
Bitcoin may drop to $10,000 in 2023, according to Mobius, who anticipates it to remain around its current level of $17,000.
The investor, who gained notoriety at Franklin Templeton Investments, told CNBC that the U.S. Federal Reserve's tightening monetary policy and rising interest rates were the main reasons he was bearish on bitcoin.
Since simply keeping the coin does not generate interest, Mobius explained via email that with higher interest rates, the appeal of holding or purchasing Bitcoin or other cryptocurrencies becomes less compelling.
"There have undoubtedly been a number of offers of 5% or more interest rates for crypto deposits, but many of those businesses have failed in part because to FTX. People thus get afraid of retaining the cryptocurrency coin in order to earn interest as those losses increase."
Many businesses have been enticing investors with exorbitant interest rates to store their cryptocurrency with them. These businesses frequently relied on lending users' cryptocurrency to other people at exorbitant interest rates and then sharing the profits with users. However, many of these businesses fell apart earlier this year as cryptocurrency values plummeted and liquidity dried up.
One such business, Celsius, declared bankruptcy in July. One more is BlockFi, which had considerable exposure to the defunct exchange FTX.
Additionally, Mobius said that the Fed's "printing machine" was directly responsible for the recent increase of more than 40% in the USD money supply.
So there was enough of money to speculate on crypto coins, Mobius continued.
The Fed has maintained extremely low interest rates and participated in quantitative easing over the past few years, which is credited with contributing to the market boom in sectors like technology stocks and cryptocurrencies. But by substantially increasing interest rates this year, the central bank has been tightening its monetary policies.
It's become extremely harder for people to play the market now that the Fed is taking back that cash, according to Mobius.
This year, Mobius has had a fair amount of success with his bitcoin calls. He predicted that bitcoin will most likely fall below $20,000, then bounce back, before settling at $10,000 in May, when its price was above $28,000.
Although the $10,000 threshold has not been crossed, bitcoin has decreased this year to as low as $15,480.
If Mobius follows through on his $10,000 call, it will be the worst few months ever for the cryptocurrency industry, which has already lost more than $1.3 trillion in value this year.