Latest News

Why is crypto crashing? Mark Cuban says ‘crypto is going through the lull that the internet went through’

0

Mark Cuban, billionaire entrepreneur and owner of the NBA’s Dallas Mavericks, thinks that cryptocurrency is on the same downward trend that tech and internet companies hit in the early 2000s.

Bitcoin hit a 10-month low on Monday, and sales of non-fungible tokens, aka NFTs, plummeted between January and March 2022.

See also: Coinbase CEO says company has ‘no risk of bankruptcy’

Cuban addressed the slump in a viral Twitter
TWTR,
-2.56%

thread on Monday. “Crypto is going through the lull that the internet went through,” he wrote.

The comparison between cryptocurrency and the early days of the internet has been made by Cuban and others including entrepreneur Gary Vaynerchuk before. The dot-com bubble burst in 2000 after several internet-centric companies received high levels of investment speculation, only to eventually bottom-out.

Cuban sold his company Broadcast.com to Yahoo in 1999 for $5.7 billion, just before the dot-com bust. Broadcast.com has since been discontinued.

See also: Nike accuses StockX of selling fake shoes after reps bought counterfeit sneakers on the site

The billionaire Dallas Mavericks owner is heavily invested and interested in the crypto and NFT space. He claims to own several thousand dollars worth of bitcoin
BTCUSD,
+0.65%
,
ethereum
ETHUSD,
-4.73%

and dogecoin
DOGEUSD,
+2.51%
,
according to a CNBC report, and also says that 80% of his investments that aren’t on “Shark Tank” are crypto-related.

But what’s next? While NFTs have exploded in popularity over the past few years, with creators like Beeple and NBA Top Shot selling NFTs for millions of dollars, recent NFT sales have plummeted as more creators flooded the marketplace. The average daily transaction volume on OpenSea, the largest NFT marketplace, was down more than 55% from January 2022 to March 2022, according to crypto data tracking platform Dune Analytics. 

See also: The 10 most popular cities that Americans moved to last year — and four are in this one state

“I think that early on, you saw lots of new entrants who were enthusiastic about this, but didn’t necessarily have a grasp of the fundamentals, and I think the cooling is a reflection of that,” Jordan Birnholtz, co-founder at NFT marketplace Neon told Distributed Ledger

Millionaire Vaynerchuk, who invested early in companies like Facebook
FB,
+0.81%
,
Twitter, Uber
UBER,
+1.77%
,
Snap
SNAP,
+4.89%

and Venmo, told MarketWatch in July 2021 that he, like Cuban, sees NFTs and crypto following similar paths as the early internet companies in the late 1990s.

I view NFTs exactly the way I viewed the internet in 1999. Internet stocks and their valuations were through the roof, prematurely, and a lot of things collapsed. Meanwhile, eBay
EBAY,
-1.63%
,
Google
GOOG,
-1.40%

and Amazon
AMZN,
+0.59%

were all there,” Vaynerchuk said.

Cuban said somethings similar in a now-deleted tweet last January. “Watching the cryptos trade, it’s EXACTLY like the internet stock bubble. EXACTLY,” he wrote. “I think BTC, ETH, a few others will be analogous to those that were built during the dotcom era, survived the bubble bursting and thrived, like AMZN, EBay, and Priceline. Many won’t.”

Cuban’s latest crypto comments on Monday came as prices for many cryptocurrencies were plummeting. Prices for bitcoin were hovering around roughly half its November peak at $32,000. Prices for ethereum are down 24% over the last three months, and down 39.2% over the last 12 months.

See also: Dow tumbles 600 points as S&P 500 slides to 13-month low

During Monday morning’s trading, shares of crypto exchange Coinbase Global
COIN,
+4.46%

fell more than 13%, MicroStrategy
MSTR,
+0.41%

shares were down over 17% and Riot Blockchain Inc.
RIOT,
+4.39%

was down over 13%.

BlackRock has a ‘worsening macro outlook’ and sees little chance of a perfect economic scenario — but it likes these 3 pockets of value in the market

Previous article

‘What are the chances? I retire and the stock market crashes. All my plans are upside down.’ I want to draw on my 401(k) to renovate my new home. What options do I have?

Next article

You may also like

Comments

Leave a reply

Your email address will not be published.

More in Latest News