Mark Mobius Sees Bitcoin Down at $10,000 in 'Dangerous' Crypto Market
Comment of the Day

November 28 2022

Commentary by Eoin Treacy

Mark Mobius Sees Bitcoin Down at $10,000 in 'Dangerous' Crypto Market

This article for Bloomberg may be of interest to subscribers. Here is a section:

“But crypto is here to stay as there are several investors who still have faith in it,” said Mobius, who spent more than three decades at Franklin Templeton Investments. “It’s amazing how Bitcoin prices have held up” despite the FTX fallout, he added.

Eoin Treacy's view

Even though may die-hard investors will never sell their cryptocurrency regardless of what happens to the price, that does not negate the fact it is a highly cyclical asset.

Two big trends drive prices in crypto. The first is limited supply. That is highlighted by the halving of the mining reward in bitcoin every four years. The next “halvening” will be in April 2024.

The second is money supply. Outsized money printing has been the hallmark of the crypto market since its inception. In fact it was created in response to the extraordinary easing during the global financial crisis in 2008.
We are currently at the point in the cycle where we should expect a crypto winter so $10000 is a reasonable downside target.

The bigger point is the cycle suggests bottoms ahead of the halvening and rebounds strongly after it. If the cycle holds we should expect a spike low bottom in bitcoin sometime in the second half of next year and outsized month printing in 2024.

The most bullish forecasts for bitcoin rely on the pattern of money printing remaining in place which implies central banks balance sheets will at least double in response to the deflationary forces unleashed by central bank tightening.

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