Downturn in crypto market may hurt other asset classes, says Mark Mobius

moneycontrol.com:

Veteran emerging market investor Mark Mobius is jittery about the spillover effects of the ongoing bear market in the cryptocurrency market on other asset classes like equities.

Speaking to business news channel CNBC-TV18 on February 15, Mobius, founder at Mobius Capital Partners, outlined his rationale for remaining bullish on Indian stocks, how long he expects the current correction in global equities to last, and the kind of companies he will invest in current market conditions.

Following are the major highlights from the interview:

On cryptocurrencies

Problem is that if cryptocurrencies go down then other markets will go down as well.

Millions feel rich because of the money they made in crypto so when cryptocurrencies go down, they feel less rich and may bail out of other markets. That's another reason why we are seeing heightened volatility across asset classes.

On market Conditions

We are in really rough water now. We probably can see another 10 percent correction in the market, but of course, this is all guesswork.

I am assuming that we are still in a long-term bull market. What I will like to do is wait and keep some cash so that when the big bear market comes you can accumulate.

The main thing right now is to be invested in companies with good earnings prospects. We are now climbing a wall of worry.

Even in this environment, there are companies that are doing very well and that's the kind of thing we should focus on.

On US Fed rate hikes

What is happening with Russia and Ukraine I think is a sideshow to the whole interest rate environment.

The Fed is a little bit late in raising the interest rate. With inflation in the US at 7 percent, then the Fed may have to raise interest rates even higher than that to give people