Bitcoin has not reached bottom yet, says fund manager

Mark Mobius, the co-founder of Mobius Capital Partners, says the bitcoin price has not yet reached its bottom during this prolonged downward trend.

Equities follow bitcoin

According to a new Bloomberg article, the investor says digital assets serve as a gauge of investor sentiment and tend to correlate with stocks. Only, his thought contradicts the majority of investors. Indeed, many think bitcoin follows the sentiment of the stock markets, but Mobius has taken a course in reverse thinking.

“Cryptocurrencies are a measure of investor sentiment. Bitcoin goes down, and the next day the Dow Jones goes down. That’s the pattern you get. That shows that bitcoin is a leading indicator.”

Buy low

Mobius also says he believes the right time to buy stocks is when investor sentiment is low after both institutional and retail investors have suffered heavy losses and are “throwing in the towel.” In other words, buy low.

Bottom comes from bitcoiners

Mobius also praises the behaviour of bitcoiners, but thinks they are also responsible for further declines.

“As long as traders are still talking about buying on dips, it means there is a sense of hope. It also means that we have not reached the bottom of a bear market.”

Will bitcoin drop to $10,000?

Mobius predicted last month that bitcoin could drop to 20 thousand dollars, and there would be a short recovery before the price could go to 10 thousand dollars.

So far, the first two parts have come true. Bitcoin is now trading at around 20 thousand dollars and has bounced slightly. Now let us hope that the last part does not become a reality.

Last week, Moody was a guest on CNBC to talk about the correlation between the stock market and bitcoin. To the astonishment of the interviewer, the investor stated that bitcoin is a leading indicator and that equities follow the movements shortly after.

Correlation between stocks and bitcoin

From 2009 to late 2010, bitcoin’s lack of correlation with the wider economy proved to be a blessing. It acted as a haven for investors interested in an asset class independent of the turmoil in the equity markets. At the time, markets had yet to recover from the crash caused by the mortgage crisis.

Over the years, you can see that more and more institutional investors and consumers are getting into bitcoin. This has ensured that since 2017, there has been a correlation between equities and cryptocurrency.