“Faith Is All That It Takes,” But Mark Mobius Says Gold Backed Crypto Will Be More Interesting


  • Crypto backed by gold will provide it with a meaningful agreement
  • But fiat isn’t backed by gold, not many assets really are
  • Anything created by man can be broken into and that can create a big crisis

Speaking on CNBC’s Squawk Box, gold proponent Mark Mobius, the founder of Mobius Capital Partners, said crypto would be more attractive if it is backed by gold.

Mobius, who manages $4 billion in assets, advises investors to allocate about 10% of their assets in physical gold.

On the topic of if Bitcoin has any inherent value, Mobius said, if there is a cryptocurrency that is backed by gold and there is a meaningful agreement — some modern connection — that would be really interesting.

However, Bitcoin skeptic turned supporter Joe Kernen argued that fiat money is not backed by gold or anything for that matter either. In today’s world, there are less than a handful assets like exchange-traded funds (ETF) that are backed by the yellow metal.

The bottom line, Mobius agrees is the faith that people have in fiat that it could be used to buy something. Just like that, he says crypto supporters have “faith in the internet.”

And the faith is all that it takes, said Mobius.

However, people will realize that it is a risky situation as it is backed by nothing, he added.

Bitcoin and cryptocurrency is a risky venture, no doubt about it. But at the same time, it offers the opportunity for extremely high returns.

As per an analysis — that uses power law model — shared by Shapeshift CEO Eric Voorhees on Twitter, the price will reach $100,000 between the period of 2021 and 2028 or each BTC will reach $1 million between 2028 and 2037.

However, this is not the first time Bitcoin’s long term value is projected to be $1 million. Popular analyst PlanB, with his stick-to-flow ratio, has predicted BTC’s value beyond $1 million.

Mobius also believes Blockchain is a “highly risky situation” that he says people believe can't be broken into. But according to Mobius, anything created by man can be broken into and that can create a big crisis. As such need to be really careful with blockchain, he warns.

Gold, however, remains the safe-haven asset that hit a six-year high recently.

But why put money into an asset that offers no yield, whatsoever, questions Kernen.

With interest rates going down below zero into the minus territory and investors worried about the economic political environment globally, they rush into gold, explain Mobius.

Furthermore, no one knows about the global money supply, what it really is.

“Simply because you have the cryptocurrencies, you have all these countries printing like crazy in order to bring interest rates down.”

Investors are not going to get anything with banks, so why not buy into gold and stock with at least some reasonable yield, he added.

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