Here’s what Mark Cuban said about the recent crypto crash
Cryptocurrencies have become an increasingly popular investment, but they are also volatile. And the crypto sector has recently experienced a major downturn. In fact, midway through the year, the total crypto market had seen a 70% decline and was down over $2 trillion from the all-time high valuation it had barely reached. seven months ago.
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 the crypto crash
Mark Cuban is the billionaire owner of the Dallas Mavericks and is a well-known investor famous for his role in the television show shark tank. He personally owns cryptocurrencies, including non-fungible tokens (NFTs) based on Ether and Ethereum.
When the market downturn began, Cuban commented on Fortune’s crash, saying, “In stocks and crypto, you’ll see companies that were backed by cheap, easy money — but had no valuable business prospects – will disappear.
This does not mean, however, that Cuba thinks that all virtual currencies will be equally affected. As he went on to explain, “As [Warren] Buffett says, “When the tide goes out, you can see who’s swimming naked.”
Essentially, this means that when times get tough, only currencies that have real value will continue to remain viable investments with growth potential. Coins that have no underlying value – in the form of innovative technology or real-world applications – will likely see their price drop dramatically and may not be able to recover at all.
Cuban remains optimistic about the future of crypto investing
Cuban was not entirely pessimistic about the future of the crypto market. While he thinks some virtual currencies are unlikely to survive the recession, he also made it clear that he thinks others will thrive.
“Disruptive apps and technologies launched during a bear market, whether in stocks, crypto or any business, will always find a market and be successful,” he said.
He also pointed to the close connection between the cryptocurrency market and the Nasdaq, which is the second-largest exchange and the exchange on which many leading tech companies list their shares, including Apple, Amazon and Meta (formerly Facebook). ). Tech companies and cryptocurrencies, especially Bitcoin, tend to operate similarly, and this has especially been the case in recent months.
While the Nasdaq has seen periodic declines, rallies have always occurred and the tech stocks listed there have rebounded. There is reason to believe that the same will happen to many virtual currencies, especially those that offer something disruptive or are backed by solid technology.
“If rates go up, there will be a hard time until they’re factored in,” Cuban said, referring to interest rate hikes spurred by the Federal Reserve’s efforts to fight climate change. ‘inflation. “The exception, as with equities, is for new, game-changing apps.”
All of this means that Cuban is unlikely to abandon his positions in the cryptocurrencies he invests in – nor would he likely advise other crypto investors to abandon the sector. This is especially true for those who make wise investments after thorough research, which they believe will be able to weather economic downturns and stand the test of time.
Earn a $50 bitcoin bonus
Our updated list of the best cryptocurrency apps for 2022 is packed full of best-in-class choices. The cryptocurrency apps that landed on our shortlist include perks like $0 commissions and a choice that offers a $50 bitcoin bonus. Check out the list here and start your crypto journey today.
Get the best choices
We are firm believers in the Golden Rule, which is why editorial opinions are our own and have not been previously reviewed, approved or endorsed by the advertisers included. The Ascent does not cover all offers on the market. The editorial content of The Ascent is separate from the editorial content of The Motley Fool and is created by a different team of analysts. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a board member of The Motley Fool. Christy Bieber has no position in the stocks mentioned. The Motley Fool holds positions and recommends Amazon, Apple, Bitcoin and Ethereum. The Motley Fool recommends the following options: $120 long calls in March 2023 on Apple and short calls $130 in March 2023 on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.