Here’s what Mark Cuban said about the recent cryptocurrency

Image Source: Getty Images

Cuban’s words are worth listening to.

Important points

• The crypto market recently experienced a crash.
• Cuban came up with some wise words about the decline for crypto investors, and is still optimistic about the future.

Cryptocurrencies have become an increasingly popular investment, but they are also volatile. And the crypto sector experienced a major downturn recently. In fact, halfway through the year, the total crypto market had experienced a 70% drop and was down more than $ 2 trillion from the all-time high value it reached just seven months earlier.

In light of this major downturn, cryptocurrency enthusiast Mark Cuban had some wise words for current and future investors in virtual currencies.

Here’s what Mark Cuban had to say about cryptocurrency

Mark Cuban is the billionaire owner of the Dallas Mavericks and is a well-known investor known for his role in the TV show Hi thank you. He personally owns cryptocurrencies, including Ether and Ethereum-based non-fungible tokens (NFT).

As the market downturn began, Cuban commented on the crash to Fortune, saying, “In stocks and cryptocurrencies, you will see companies that were maintained by cheap, easy money – but that did not have valid business prospects – disappear.”

This does not mean that Cubans believe that all virtual currencies will be equally affected. As he went on to explain: “Like [Warren] Buffett says, “When the tide goes out, you get to see who swims naked.”

Essentially, this means that when times get tough, only those currencies that have real value will continue to remain viable investments with potential for growth. Coins that have no underlying value – in the form of innovative technology or real-world applications – are likely to see prices fall dramatically and are unlikely to recover at all.

Cuban remains optimistic about the future of cryptocurrencies

Cuban was not entirely pessimistic about the future of the crypto market. Although he believes that some virtual currencies are unlikely to survive the downturn, he has also made it clear that he believes others will thrive.

“Disruptive applications and technology released under a bear market, whether it is stocks or crypto or any business, will always find a market and succeed,” he said.

He also pointed out the close connection between the cryptocurrency market and Nasdaq, which is the second largest stock exchange and the stock exchange where many leading technology companies list their shares, including Apple, Amazon and Meta (formerly Facebook). Technology companies and cryptocurrencies, especially Bitcoin, tend to perform in similar ways, and this has been particularly the case in recent months.

Although Nasdaq has experienced periodic downturns, upswings have always occurred, and the technology stocks listed on it have declined. There is reason to believe that the same will happen with many virtual currencies – especially those that offer something disruptive or that are supported by sound technology.

“If interest rates go up, it will struggle until it is priced in,” Cuban said, referring to rising interest rates spurred by the Federal Reserve’s efforts to fight inflation. “The exception, as with stocks, is for new, game-changing applications.”

All this means that Cuban is unlikely to give up his positions in the cryptocurrencies in which he is invested – and that he will probably not advise other crypto investors to leave the sector either. This is especially true for those who make good investments after careful research, who they believe will cope with economic downturns and withstand the test of time.