Mobius expects the price to fall to $10,000

Mark Mobius

The prominent investor considers investments in Bitcoin to be “too dangerous”.

(Photo: Bloomberg/Getty Images)

Frankfurt The spectacular bankruptcy of the crypto exchange FTX in mid-November shook the entire industry. But if you believe the prominent fund manager Mark Mobius, the massive slide in the price of the oldest and largest cryptocurrency Bitcoin could go much further.

Mobius expects Bitcoin to fall towards $10,000 mainly due to the dislocations triggered by the FTX scandal. That would be a drop of another 40 percent from the current level.

This would take the cryptocurrency back to its spring 2020 lows after the outbreak of the Covid pandemic. Meanwhile – in November 2021 – Bitcoin was worth around $65,000 after a long rally.

In an interview with the Bloomberg news agency, Mobius made it clear that he would not invest his own capital or client funds in digital assets – it was “too dangerous”. However, Mobius considers a complete disappearance of Bitcoin & Co. to be unlikely. “Crypto is here to stay because there are some investors who still believe in it.”

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FTX, once the world’s third largest trading platform for cryptocurrencies, had to file for bankruptcy protection on November 11th. Founder Sam Bankman-Fried is accused of stealing billions of dollars in customer funds. He is said to have partly plugged holes in his hedge fund Alameda and partly enriched himself.

>> Read here: The bankruptcy of FTX and its consequences for the crypto world

In just three years, Bankman-Fried has built an empire that includes more than 100 subsidiaries around the world. Lawyers and restructuring specialists are now in the process of disentangling the complex structures of the company network in search of assets in order to at least partially compensate the more than one million creditors. FTX says it owes around $3.1 billion to the top 50 creditors alone.

Fear of a China crisis exacerbates losses

At the beginning of the week, the major cryptocurrencies continued to fall. Bitcoin was meanwhile down more than three percent and was quoted at around $16,200. Since the collapse of FTX, the losses have added up to around a quarter.

The second-largest cryptocurrency, Ether, fell around two percent towards $1,170 on Monday. Smaller digital currencies like Solana, Avalanche, and Dogecoin suffered even heavier losses.

The shares of companies that make their money in the crypto industry also came under renewed pressure. The price of the crypto exchange Coinbase fell by more than three percent. Within a month, the company, which went public in the US in April 2021, has lost around 40 percent of its market value.

Behind the current losses in the crypto world are not only the upheavals surrounding FTX, but also the unrest in China. In more and more cities in the People’s Republic, people are taking to the streets against the government’s zero-Covid strategy, presenting the Communist Party with the greatest challenge since the Tiananmen crisis more than 30 years ago.

Fear of an escalation of the conflict prompted a worldwide flight to conservative investments such as the Japanese yen, the Swiss franc and the government bonds of the major economic powers. Investors increasingly avoided risky investments such as cryptocurrencies.

More: European customers of FTX could be paid out more easily

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