Nikushimi

To be "more sinister than the Kyuubi", you'd have to be...pretty damned sinister. No regular-ass Uchiha with a regular-ass Sharingan is gonna be more sinister than the freaking Kyuubi.
A few good reasons why I think the Kyuubi was referring to Mangekyou are as follows: 1.) for the Kyuubi to acknowledge something as being "more sinister" than itself, it must be pretty damned evil, 2.) for the Kyuubi, a demon, to call the Uchiha bloodline "cursed", it must mean "Mangekyou", and 3.) for the Kyuubi to consider someone to have anything powerful (considering how powerful the Kyuubi itself is), that person must be freaking amazing.
Those are just three really basic reasons.

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