Mark Cuban: Crypto Firms Sustained By ‘Cheap, Easy Money’ Will Disappear In A Collapse

Billionaire Dallas Mavericks owner Mark Cuban has weighed in on the latest cryptocurrency crash, saying that projects without a “valid” business model will eventually die out.

“In stocks and cryptocurrencies, you will see companies that were sustained by cheap, easy money, but had no valid business prospects, they will disappear,” Cuban said in an interview with Fortune.

The 63-year-old businessman also recalled American tycoon Warren Buffet, who once said that “when the tide goes out, you can see who is swimming naked”.

Last month, amid a broader tech market crash, the crypto industry was rocked by the implosion of the Terra ecosystem when its algorithmic stablecoin UST lost its peg to the dollar, wiping billions in wealth out of cryptocurrencies. investors.

The crypto industry took another hit this week, after the Celsius Network, a crypto lending platform with $11.8 billion in assets under management, abruptly stopped withdrawals.

Major cryptocurrencies plunged after the announcement, with the bitcoin price (BTC) touching $20,000 on Wednesday.

As the combined market capitalization of the crypto market fell below $1 trillion, a number of leading crypto firms, including United States digital asset exchange Coinbase and lending platform BlockFi, moved to cut staff, which generated more uncertainty in the market.

The crypto crash has also brought increased attention to software maker MicroStrategy, which is reportedly facing a margin call on a $205 million Bitcoin-backed loan with Silvergate Bank that was taken in March to buy more crypto. , as well as the Singapore-based cryptocurrency hedge fund. Three Arrows Capital, which is in danger of seeing its multi-million dollar crypto loans liquidated.

The key to success is innovation

Despite the clearly negative market environment, Cuban sees the light at the end of the tunnel and is committed to innovation.

According to the billionaire, “disruptive applications and technology launched during a bear market, whether it be stocks, cryptocurrencies, or any business, will always find a market and be successful.”

Cuban’s latest comments also echo comments he made last month, when he compared the current state of the crypto industry to the dotcom bubble of the early 2000s.

Back then, Cuban also said he still sees a lot of room to move forward, especially in trade-related areas. smart contract platforms that replace software as a service (SAAS).

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