Veteran Investor Reinforces Bitcoin Store of Value Narrative

Reading Time: 2 minutes
  • Veteran investor Mark Mobius has said that Bitcoin is increasingly being seen as a store of value
  • Mobius added that the recent drop in the gold price is at least partly attributable to Bitcoin
  • The investor also added that a drop in the Bitcoin price could hurt tech stocks

Veteran investor Mark Mobius has claimed that one of the reasons for the recent downturn in the gold price is because money is flowing out of gold and into Bitcoin. Speaking to Bloomberg this week, Mobius, who has been called “the Indiana Jones of emerging market investing” and whose net worth is said to be some $50 million, said that Bitcoin is increasingly being seen as a store of value and that there is a clear relationship between the two, albeit and inversely correlated one.

Gold Down 20%, Bitcoin Up 417%

The price of gold rocketed to $2,075 per oz in August last year, since when it has fallen 20%, hitting relative lows of $1,675 on Wednesday. During the same period Bitcoin has risen 417%, with a flow of gold to Bitcoin being pointed out by several commentators. Responding to a question about the huge outflows from gold ETFs alongside its declining price, Mobius said that Bitcoin is partly to blame:

I think there…is a relationship between Bitcoin and gold because you talk to all these people and they say “gee, Bitcoin is like gold, it’s a store of value, so I think there’s some relationship between these two, and one of the reasons why gold is down…

Bitcoin’s use case as a store of value is one of the reasons behind the huge surge in institutional buying that has taken place in the past year, with many seemingly preferring it over gold.

Tech Stocks Linked to BTC Price

Mobius added that one of the things he “fears” is a decline in the Bitcoin price, a sentiment that has been taken out of context in some mainstream outlets, who took it to mean that he was expecting a reversal – despite adding that it was “not a prediction”. Mobius was instead talking in context of tech stocks, saying that a decline in the Bitcoin price, if it were to happen, would result in a drop in tech stocks on the Nasdaq:

I think the relationship between the Bitcoin price and the tech market is very close, so watch that indicator. If the Bitcoin price goes down I think the tech stocks will get hit very badly.

The link between Bitcoin and tech stocks is in some ways unsurprising given that tech companies are starting to buy up the asset and also because it has a technological background, but we are yet to see a definite correlation between the two.