Billionaire Mark Cuban says crypto is missing something
In November 2021, the cryptocurrency was in full madness mode. Call it cryptomania.
Retail investors, especially millennials and Gen Z, invested heavily in cryptocurrencies and other crypto projects driven by FOMO, Fear of Missing Out.
Institutional investors invested in crypto projects such as those related to decentralized finance, which means financial services without an intermediary.
Non-functional tokens then arose, and became the buzzword by the end of the year. NFTs, which are a way to claim ownership of a piece of online content, such as an image or recording, were then seen as the future of art.
Facebook CEO Mark Zuckerberg has changed the name of his social media empire to Meta Platforms (META) and said the metaverse, an immersive virtual world accelerated by the crypto industry, was the future of his company.
In fact, cryptocurrency prices rose to the point where the market reached a value of $3 trillion in early November 2021. Bitcoin rose to $69,044.77 and ether, the #2 digital currency, rose to $4,878.26.
This craze created crypto millionaires and billionaires.
The Crypto Decline: Cuban Weighs In
Less than a year later, the bubble has burst. The crypto market has crashed: the market is valued at $996 billion, according to data firm CoinGecko. Bitcoin has lost 73% of its value compared to its all-time high, while Ether is down 68% from its record.
The NFT market has also collapsed. Trade volumes on OpenSea, Amazonas (AMZN) of NFTs, has fallen, according to DappRadar.
Coin base (COIN) , the most popular cryptocurrency exchange platform in the US, has seen its stock market value melt. Coinbase shares are down 75% since January. Robin Hood (HOOD) The Gen Z brokerage, which also benefited from cryptomania, is down 46% since January.
Overall, the current picture is pessimistic for the crypto industry, which is going through what insiders call the crypto winter, a period of falling prices.
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One leader in a prime position to speak on the subject is billionaire entrepreneur Mark Cuban. And as TheStreet has reported elsewhere, he doesn’t mince words. He believes that the crypto space seems to have lost its luster and the excitement it used to bring.
“Crypto definitely has a place,” the billionaire said at Vox Media’s 2022 annual code conference on Sept. 6, according to excerpts of the interview led by journalist and host Kara Swisher. “[What’s] missing are new applications.”
Cuban has invested in diverse projects ranging from web 3, the new iteration of the internet, to blockchain companies to NFTs to the ether cryptocurrency, whose ethereum platform he supports. He has invested in Yuga Labs, which owns the famous NFT’s Bored Ape Yacht Club collection.
“It’s a bit boring”
Cuban is a known ethereum maximalist, meaning he favors the platform over other blockchains. Ethereum has smart contracts, which are computer code that determines the terms of a transaction (loan, trade, etc.) and does not depend on any third party.
“Just like in the early days of the Internet, we’re sailing with the Internet. It’s all boring, right? Because we haven’t seen anything new. And it really took until the mobile came along to really drive it forward. And we haven’t right now for crypto, so it’s kind of boring,” the “Shark Tank” star told Swisher.
He added: “And it’s just going to stay boring with [decentralized finance] and NFTs as collectibles and maybe some other little things that come to interest.”
However, Cuban will continue to invest in the crypto industry, he said. “I’m still very interested and still investing, but it’s just early days.”
This is not the first time the entrepreneur has criticized the fledgling crypto industry at a time when public interest in it is waning.
This easing of interest rates is understandable after a summer that saw a liquidity crunch plus prominent lenders such as Voyager Digital, Celsius Network and hedge fund Three Arrows Capital file for Chapter 11 bankruptcy or be forced into liquidation.
“In stocks and crypto, you’ll see companies that were sustained by cheap, easy money — but didn’t have valid business prospects — will disappear,” Cuban warned last June. “As [Warren] Buffett says, “When the tide goes out, you’ll see who’s swimming naked.”
The billionaire has also been sued by individual investors who hold him responsible for the losses they say they suffered from bankrupt lender Voyager Digital. In October 2021, the Cuban NBA franchise, the Dallas Mavericks, had signed a five-year deal with Voyager to market cryptocurrencies
