This Fund Manager Believes Low Bitcoin Prices Could Negatively Impact Tech Stocks

What Happened: Mark Mobius, founding partner at London-based asset management firm Mobius Capital Partners, expressed concern that lower Bitcoin prices could hit tech stocks “very badly.”

In an interview with Bloomberg, Mobius said one of the things he fears in the current market scenario is a declining Bitcoin price with respect to tech stocks.

“I think the relationship between Bitcoin prices and the tech market is very close,” he said, cautioning investors to watch that indicator closely.

Mobius also believes that there is a relationship between Bitcoin and gold. He explained that he sees Bitcoin as a store of value, similar to gold.

In his view, this relationship may be the cause of the massive gold ETF outflows observed over recent weeks.

“I think there’s some relationship between these two,” said the investor, adding that in his view, this [relationship] might be one of the reasons for the curret gold downward trend.

 "<...> otherwise there’s no good reason that gold should be down,” Mobius believes.

Why It Matters: According to recent data from the World Gold Council (WGC), gold-backed ETFs lost over two percent in AUM, making this the seventh-worst historical monthly holdings loss.

Reports suggest that trading volumes for gold also fell by over 12% during the same period, with the monthly average being $166 billion per day.

These outflows continued despite concerns that the new stimulus package would lead to increased inflation. Gold has historically been considered an ‘inflation hedging asset.' However, the most recent data might support Mobius’s view that investors are stockpiling their assets into Bitcoin instead of gold.

Price Action: The market-leading cryptocurrency was trading at $56,543 at press time, up over 4% in the past 24-hours.