Bitcoin, which has been rapidly climbing in price over the last couple of months, has reignited the public debate surrounding the future of cryptocurrencies, their value as investments and their use in an increasingly digital world.
The bitcoin price, now double where it began 2019, has been hovering just above $8,000 since gaining $2,000 per bitcoin in just a few short days at the end of last week, and many are hailing a new bitcoin and cryptocurrency bull run—with eyes on the $20,000 per bitcoin reached in late 2017.
Now, Mark Mobius, the cofounder of Mobius Capital Partners and a legendary, veteran investor who once branded bitcoin a “real fraud”, has said bitcoin will be “alive and well” in the future.
Despite changing his tune on the potential of bitcoin and crypto, Mobius said he has held off investing in bitcoin or other cryptocurrencies himself.
“Whether I would invest in it is not a question,” Mobius said. “You have incredible volatility and, at the end of the day, you can’t chase one individual group or one organization that will keep track of what is going on.”
“You have to be very careful,” he added, pointing to the collapse of one-time preeminent bitcoin exchange Mt. Gox in early 2014 which lost early bitcoin investors millions.
“Many of those who are heavily entrenched in the old financial system are unsurprisingly unswayed by the benefits of crypto, but that’s changing rapidly,” Greenspan wrote about Mobius’ flip in a note to clients. “The volatility is one of the most attractive qualities of crypto from an asset managers perspective. The idea of asymmetric risk allows us to use this unique and uncorrelated asset class to greatly increase our return on risk in any otherwise well-diversified portfolio.
“Just as I, in my portfolio, am holding about 3.5% in emerging markets, I believe that one day soon asset managers around the world will diversify with crypto.”
Mobius also warned that growing tensions between the U.S. and China, the world’s two largest economies, is much more an ideological struggle than just the trade war it has been spun as so far, given the $300 billion trade deficit and the rising capability of technology in China.
Mobius, who has previously described U.S. president Donald Trump as “dumb as a fox”, set up Mobius Capital Partners in early 2018 after serving as Templeton’s emerging markets investment group executive chairman since 2010, a fund he first joined in 1987.