Bitcoin has soared back this week after struggling to maintain its early 2021 momentum through the last week of February and into March.
The bitcoin price has added more than 10% in recent days, climbing back above $50,000 and toward its all-time high of $58,000 per bitcoin as the U.S. approved a huge $1.9 trillion coronavirus stimulus package.
With the bitcoin price up a blistering near-600% over the last 12 months, investing legend Mark Mobius has warned a sharp bitcoin decline could hit tech stocks “very badly.”
“One of the things I fear, believe it not, is a decline of the bitcoin price. I think the relationship between bitcoin prices and the tech market is very close,” Mobius, the founding partner of Mobius Capital Partners, told Bloomberg this week, adding investors should: “Watch that indicator.”
Bitcoin’s screeching rally has been put down to a combination of Wall Street institutional adoption, corporate interest, and retail traders piling into the bitcoin and cryptocurrency market.
In early February, Tesla, the electric car-maker led by billionaire Elon Musk, set the bitcoin market alight when it revealed it had bought $1.5 billion worth of bitcoin. Speculation other tech companies could follow Tesla into bitcoin have fanned the flames, with cryptocurrency mania engulfing markets.
“Hopefully [bitcoin] stays up, I am not predicting or wishing it goes down,” Mobius said. “But I just hope it stays up because tech stocks then will be able to revive.”
Tech stocks that have taken a battering in recent weeks have climbed so far this week, moving higher in tandem with the bitcoin price, led by Tesla.
As the bitcoin price has climbed, bitcoin investors and cryptocurrency analysts are again feeling confident the recent bull run is not yet over.
“After dipping as low as $53,500, buyers have re-entered the main stage and pushed bitcoin to $57,000,” Alex Kuptsikevich, senior financial analyst at FxPro said in emailed comments. “There is a good chance that the benchmark cryptocurrency will head into territory above $60,000.”