Legendary investor Mark Mobius says investors should watch bitcoin to figure out if the stock market has bottomed

• Bitcoin is acting as a leading indicator for stocks, billionaire investor Mark Mobius told Bloomberg.
• "Cryptocurrencies are a measure of investor sentiment," he said in an interview published Wednesday.

Bitcoin is giving stock investors insight into where the equity market is headed, veteran investor Mark Mobius told Bloomberg in an interview published on Wednesday.

"Cryptocurrencies are a measure of investor sentiment," he said. "Bitcoin goes down, the next day the Dow Jones [Industrial Average] goes down. That's the pattern you get. That shows that bitcoin is a leading indicator."

The co-founder of Mobius Capital Partners and a preeminent investor in emerging markets spoke as the cryptocurrency market has been undergoing a "crypto winter" with prices struggling to capture or capitalize sustainable gains.

The broader crypto market has dropped to less than $1 trillion in valuation after hitting all-time highs above $3 trillion in November. Bitcoin was trading around $20,066 on Wednesday, down more than 70% from its all-time high of $69,000 in November.

Mobius said sentiment in the equity market hits rock bottom only when institutional and retail investors stop plowing more money into the market because of sharp losses. "That's the time to start buying stocks," he said.

US stocks have sunk into a bear market as the Federal Reserve increases borrowing costs to cool the hottest rates of consumer price inflation in 40 years. With the Nasdaq Composite losing nearly 30% and the S&P 500 down more than 20%, market watchers have been on the lookout for signs the sell-off has run its course.

But if bitcoin investors "are still talking about buying on dips, that means there is a feeling of hope," Mobius said. "That also means that we have not reached the bottom of a bear market."