Crypto and blockchain are “very risky situations”
When CNBC’s crypto activist Joe Kernen asked whether Mobius believes that Bitcoin has inherent value, the famed investor avoided answering the question directly, claiming that the world really needs a cryptocurrency that would be backed by gold.
“If there is a cryptocurrency that is really backed by gold — and that is, there is a meaningful agreement and some kind of modern thing of this connection — then this could be quite interesting.”
Anything created by humans can be broken into
Kernen noted that there is no fiat currency that is backed by gold, raising the question why any crypto needs to have the same backing, Mobius conceded that the key point in the issue is the question of faith. Mobius elaborated that there is a whole generation of people who have faith in the Internet as well as cryptocurrencies, and “that’s all it takes:”
“The reason why people believe in the U.S. dollar is because they have faith that with dollars in their hands, they can buy something. So there’s a degree to which if cryptocurrency can enable you to buy something and you believe that to be the case, that’s fine.”
While reiterating his recent statements that it is a matter of faith whether people believe in Bitcoin or any other crypto, the veteran investor still emphasized concerns over the industry, arguing that people will soon begin to realize that cryptocurrencies are very risky.
Moreover, blockchain technology also poses a significant risk, Mobius noted, stating that blockchain can be broken into just as every technology created by humans, despite a blockchain’s function of immutability.
On Aug. 20, Mobius suggested that cryptocurrencies have the potential to boost the price of gold, predicting that the rise of faith in Bitcoin and other cyber-currencies will trigger a demand for a real, hard asset such as gold.