Connect with us

Hi, what are you looking for?

Technology

Mark Cuban thinks the crypto crisis will wipe out many cryptocurrencies from the market

SHARK TANK - "1019" - First into the Tank are sisters from San Jose, California, who combine two delectable desserts into one amazing treat. An entrepreneur from West Hollywood, California, pitches his modern alternative to traditional ATM machines. An entrepreneur from New York City presents his clothing design for both men and women that combines two comfortable fashion trends into one. Last into the Tank is an entrepreneur from Mclean, Virginia, who introduces his hypoallergenic sleeping product that helps reduce snoring and dry mouth on "Shark Tank," SUNDAY, APRIL 21 (10:01-11:00 p.m. EDT), on The Walt Disney Television via Getty Images Television Network. (Walt Disney Television via Getty Images/Tony Rivetti) MARK CUBAN
  • American investor Mark Cuban claims that the crypto crash, currently in full swing, reminds him of something Warren Buffett said: “When the tide goes out, you get to see who is swimming naked”.
  • Cryptocurrencies are facing the biggest correction in their history in the midst of a market marked by high volatility and rampant uncertainty.
  • Cuban predicts that many companies and cryptocurrencies will sink and disappear as a result the current crisis.

The crypto market is experiencing one of the worst periods of its brief history, with a state of correction that threatens to pull Bitcoin and Altcoins tothe lows of 2019 in the coming days.

Following announcements by the Federal Reserve of a 0.75 basis point increase in interest rates this week, the crypto market gained a brief moment of respite, with digital currencies recovering some of their prices. But analysts agree that the damage won’t go away any time soon.

In statements to Fortune magazine, billionaire crypto investor Mark Cuban predicted that "In stocks and crypto, you will see companies that were sustained by cheap, easy money—but didn’t have valid business prospects—will disappear."
The producer of Shark Tank and owner of the Dallas Mavericks compared the current situation facing the industry with a statement Warren Buffett made some time ago: "When the tide goes out, you get to see who is swimming naked."

Like other observers and analysts, Cuban believes the market is heading into a process of extinction for hundreds of cryptocurrency projects. Risky assets, which long roused the appetite of whales and retail investors, were the first to suffer the effects of the pivot taken by central banks around the world.

With seeming end coming to the era of easy money, especially from pandemic stimuli checks which helped immensely to inflate digital assets and their related stocks, the crypto market is facing down one of its biggest historical corrections.

The Impact of Fed Announcements on Crypto
The fear that the actions of the Fed and other global issuers will provoke a new recession in their adoption of aggressive monetary policy (e.g. rate hikes and withdrawal of stimuli) to contain inflation has unleashed an unprecedented crisis.

Cryptos across the board, led by Bitcoin and Ethereum, have seen monumental losses in recent weeks. The crypto crash was particularly exacerbated by the collapse of the Terra Luna ecosystem, and the subsequent domino effect collapse of companies in the crypto sphere, which in turn rang serious alarms of concern among regulators and paniced investors.

This week, crypto lending giant Celsius Network suspended withdrawals on its platform, igniting investor fears about the outlook for other companies being infected by the crisis.

Major exchanges, such as Crypto.com, BlockFi and Coinbase, have announced significant staff cuts, payroll freezes, and adjustments in their budgets in order to better endure the oncoming crypto winter – the end of which no one has ventured forecast. Binance stands as an exception, announcing the listing of 2,000 new jobs.

Reports are also circulating that crypto fund Three Arrows Capital is close to possible insolvency after paying out $400 million to clients. Indeed, by and large, shares of companies that trade in cryptocurrencies or have exposure to digital assets have fallen sharply of late.

Despite the difficult times the industry is currently experiencing, Cuban continues to believe in the value of cryptocurrencies. He asserts that, after the crisis of digital assets, a more innovative and successful industry will emerge.

“Disruptive applications and technology released during a bear market, whether stocks or crypto or any business, will always find a market and succeed,” the tycoon stated.

According to Cuban, cryptocurrencies are associated with the Nasdaq, hence the reason that technology stocks and BTC have simultaneously been moving in the same direction. Recently, the correlation between the U.S. stock index and the leading cryptocurrency has seeminglyreached its  peak.

“If rates go up, it will struggle till it’s priced in. The exception, as with stocks, is for new, game-changing applications”, the Ethereum maximalist, as he describes himself, who is a great investor in cryptocurrencies and companies in the sector, told Fortune.

Featured

Bitcoin

The crypto market is bracing for a potential surge as the U.S. presidential election nears, with experts offering bold predictions for Bitcoin’s price trajectory....

etf

The launch of new spot Bitcoin (CRYPTO: BTC) ETFs in January was a watershed event for the crypto industry. Arguably, it was Wall Street’s biggest new product...

Bitcoin

US-based Wells Fargo publicly announced its spot Bitcoin ETF investments in a statement to the US Securities and Exchange Commission (SEC). On the other...

Bitcoin Mining

The mining industry for Bitcoins incurred a sizeable debt load during the bull market of 2021, which hurt their financial health during the subsequent...