Crypto is struggling, but one high profile investor thinks there is more to it.
Mark Cuban has become renowned for his successful venture capitalist career in the early 2000s. He invested in some of the first social networks and software to come around and has since seen his net worth climb to nearly $4.7 billion.
Since he’s no stranger to innovative technologies, it comes as no surprise that Cuban has been a vocal advocate for what cryptocurrency and blockchain technology has to offer. He made headlines in 2021 when his National Basketball Association basketball team, the Dallas Mavericks, said it would accept Dogecoin for merchandise and tickets.
Cuban is more than just a fan of Dogecoin. He considers himself an Ethereum maximalist, which means he believes in Ethereum more than other blockchains. He has also made plenty of purchases in the NFT (non-fungible token) market.
While his investments, like many others, are worth considerably less than just a year ago, Cuban remains optimistic about the direction crypto is headed.
Despite the recent pullbacks and talk about a crypto winter, Cuban believes this decline in prices is healthy and necessary to weed out weak competitors in the crypto economy. In a recent interview he said that the recent bull market fostered an environment for companies that didn’t actually have “valid business prospects” to stick around longer than they should have. He made reference to a famous Warren Buffet quote that seems fitting, “When the tide goes out, you get to see who is swimming naked.”
Given current macroeconomic factors like inflation, rising interest rates, and the slowing economy, it makes sense that the blockchains and cryptocurrencies that have failed to provide any real-world value would suffer the most.
In addition, events in the crypto market that have recently transpired have only added to the less-than-ideal macroeconomic factors. When the Terra blockchain imploded in early May as the result of its UST stablecoin losing its peg to $1, it caused a widespread market sell-off.
And just last week, one of the most popular crypto lending platforms, Celsius, announced that it would halt withdrawals as the result of the poor economic conditions. This announcement sent all cryptocurrencies down even more.
Yet despite all of this, Cuban still thinks there is hope and value for crypto over the long haul. Specifically, he believes bear markets force companies to innovate. Cuban elaborated, saying, “Disruptive applications and technology released during a bear market, whether stocks or crypto or any business, will always find a market and succeed.”
A final thought
Mark Cuban has seen his fair share of bear markets. It seems that in his opinion bear markets should be a cause for concern but not a cause for hysteria.
Bear markets create opportunities for blockchains and investors alike. Cryptocurrencies that continue to develop innovations in a bear market position themselves for long-term success.
Read More:What One Tech Guru Thinks of the Current Crypto Market | The Motley Fool