Mark Cuban, a billionaire crypto investor and owner the Dallas Mavericks, says that the current market downturn reminds of an old Warren Buffett adage.
Cuban sees a parallel in the rise and fall of crypto projects and markets to the 91-year old ‘Oracle of Omaha’s aphorism: “Only when you find who’s been swimming naked that you can discover who’s been swimming naked.”
Cuban made the observation during a Fortune interview on June 16, where he talked about what he considers to be flawed business models in some crypto projects that have been struggling over the past two years.
The Shark Tank investor stated that companies that have been sustained by easy, cheap money, but don’t have viable business prospects, will disappear in stocks and crypto.
“Like Warren Buffett said, ‘When you see the tide go out, you can see who’s swimming naked.’
Terra, Celsius and Three Arrows Capital are just a few of the companies that seem to have been swimming naked.
By the middle of May, Terra Classic, formerly Terra Ecosystem, had completely collapsed. Investors suffered losses in the tens of millions due to this collapse. Do Kwon, the founder and CEO, has been pursued by various regulatory agencies.
If the recent pause in withdrawals shows, Celsius’s lending and staking platform is struggling to stay solvent. Three Arrows Capital, an investment firm, is said to have suffered a liquidation of $400 million. The company has not been able to pay margin calls.
Cuban stated that despite the grim outlook for crypto in the short-term, downturns can have a cleansing effect on markets and this would likely be true for crypto. He said that innovation should be supported.
“Disruptive technology and applications released during bear markets, whether in stocks or crypto, or any other business, will always find a place and succeed.”
Marc Lasry, Avenue Capital Group CEO, has a more dire assessment of the financial markets. Bloomberg TV forecast that the economic pain would continue into 2022, with equity indices falling by as much as 10%. Lasry however believes that the US economy remains strong enough to prevent the current downturn from becoming too severe.
Since 2018, Lasry is a crypto bull. Cointelegraph reported in 2021 that Lasry lamented not having bought enough BTC. He told Bloomberg TV, however, that Bitcoin (BTC), Ether (ETH), had already fallen more than anticipated and that “Nobody knows where the bottom is.”
He said that professional investors can’t predict a bottom and that it was difficult to invest when they could.
Related: 72 out of 100 top-selling coins have dropped 90% or more. Here are the lone stragglers
Eileen Wilson –Technology and Energy
My Name is Eileen Wilson with more than 5 years of experience in the Stock market industry, I am energetic about Technology news, started my career as an author then, later climbing my way up towards success into senior positions. I can consider myself as the backbone behind the success and growth of topmagazinewire.com with a dream to expand the reach out of the industry on a global scale. I am also a contributor and an editor of the Technology and Energy category. I experienced a critical analysis of companies and extracted the most noteworthy information for our vibrant investor network.