The investment manager Mark Mobius of Mobius Capital Partners, in an interview with Bloomberg TV, made an interesting point yesterday:
“The real problem is in the tech sector… particularly those companies that have no earnings and that have been pushed up dramatically. And believe it or not, one of the things I fear is the decline in the bitcoin price. I think the relationship between bitcoin prices and the tech market is very close, so watch that indicator. I think bitcoin prices go down, the tech stocks are going to be hit very badly.”
Proponents of bitcoin as a value creator have pointed to its relatively low correlation with other asset classes as a big plus. However, Mobius makes the point that that isn’t necessarily true – tech stocks that have been responsible for a large part of the recent rise in the US stock markets are now correlated with bitcoin’s price.
I think part of it is the recent interest, some months old now, of marquee companies like Tesla buying bitcoin. We saw yesterday how that corporate buying of bitcoin has actually slightly reduced public availability of bitcoin on exchanges.