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Billionaire fund manager and founder of Mobius Capital â Mark Mobius â represented cryptocurrencies as a âmeasure of investor sentiment.â He classified bitcoin as a leading indicator that shows how the Dow Jones index will perform in the short term.
BTC Has Not Bottomed Yet
The American-born legacy investor Mark Mobius opined that stock traders should carefully observe what is happening in the crypto market to make the right investment choices. Specifically, he argued that bitcoinâs price is a âleading indicatorâ that could suggest whether the Dow Jones (a popular stock index that tracks 30 of the largest US companies) will head north or south:
âBitcoin goes down, the next day the Dow Jones goes down. Thatâs the pattern you get. That shows that bitcoin is a leading indicator.â
Mobius stated that the bottom in traditional markets is reached when institutional and retail investors âthrow in the towelâ and stop pouring cash due to constant losses. In bitcoinâs case, though, people âare still talking about buying on dips that means there is a feeling of hope.â It also signals that the bear market has not yet hit its bottom.
Unlike many other investors who prefer to distribute their capital into real estate, precious metals, or cryptocurrencies due to the current inflationary environment, Mobius said he would instead hold âsome cash.â At a later stage, he might invest in Indian stocks in the building-materials sector and software and medical-testing sectors.
Mark Mobius, Source: Barrons
Predicting BTCâs Price Is a âLoserâs Gameâ
In 2020, Mobius claimed that guessing what bitcoinâs USD valuation will be after a certain period of time is much similar to winning a lottery â or simply gambling:
â[Bitcoinâs price is] based on no reliable information ⊠[Itâs rise is a] casino operation based on all sorts of rumors and speculation.â
In the past, there have been moments when the primary cryptocurrency has moved relatively at the same pace as gold and the S&P 500. In fact, bitcoinâs price charts have been much similar to the aforementioned index that follows the performance of Americaâs 500 most powerful publicly-traded firms in the past months.
According to Mobius, though, one should not rely on such correlations as bitcoin has a character of its own, and trying to forecast its future price is a âloserâs game.â
Featured Image Courtesy of Money Inc
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The views and opinions expressed in this article are solely those of the authors and do not reflect the views of Bitcoin Insider. Every investment and trading move involves risk - this is especially true for cryptocurrencies given their volatility. We strongly advise our readers to conduct their own research when making a decision.