Cryptocurrencies have become an increasingly popular investment, but they are also a volatile one, and the crypto sector experienced a major downturn. In fact, at the halfway point of the year, the total crypto market had experienced a 70% drop and was down more than $2 trillion from its all-time high valuation. In light of this major downturn in cryptocurrency, it reached just seven months prior.
Mark Cuban had some wise words for current and future investors in virtual currencies. Mark Cuban is the billionaire owner of the Dallas Mavericks and is a well-known investor, famous for his role in the TV show Shark Tank. He personally owns cryptocurrencies, including Ether and Ethereum-based non-fungible tokens. When the market downturn began, Cuban commented on the crash to fortune, stating in stocks and crypto you will see companies that were sustained by cheap easy money but didn’t have valid business prospects will disappear. This does not mean Cuban believes all virtual currencies will be equally affected, though. As he went on to explain, like Warren Buffett says, when the tide goes out you get to see who is swimming. Cuban was not entirely pessimistic about the future of the crypto market. Although he believes some virtual currencies will likely not survive the downturn, he’s also made it clear that he thinks others will thrive. Disruptive applications and technology released during a bear market, whether stocks or crypto or any other business, will always find a market and succeed, he said.
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So, what do you think about the crypto future of crypto and all that?
I’m still bullish on crypto. I’m bullish, obviously, because you know its way down right now. I mean, I took a hit. Everybody took a hit on crypto. So crypto is divided into two different categories: If you will, there’s a store of value, which is Bitcoin. I don’t care what the Maxi say, Bitcoin is worth what somebody will pay for it. You know what the maximum number of Bitcoins out there is going to be? 21 million? That’s it right, and that’s a good thing, but you’ve got to have people who want to own it and hold it in order for the price to go up. What happened when everybody was buying? The price went up. It’s a monetary value. Because it’s driven by supply and demand, I think it’ll replace a lot of gold holders, people you know who in the past have owned gold, and because no one owns physical gold, it’s really just a digital transaction anyway, and Bitcoin’s a better version of that than gold. So, I think Bitcoin is going to be okay. But where the price is going to go and when it’s just supplying.
What about Ethereum?
Ethereum is the one thing I like the best right now. Me too, but here’s why Ethereum is driven by utility, right? A reason to use it. You know, Bitcoin Maxis will tell you that, there’s the lightning network and you can do wire transfers and money transfers around, and that’s true, but there’s also a site called crypto fees dot info, right, and that tells you how much, how much in transaction fees the network is actually generating, so you know how busy it is and how much help whether people are paying gas fees for transactions. You can see on Bitcoin it’s been going down, not up, and on Ethereum. It’s the same way. But there is millions of dollars’ worth of transactions that take place there. The issue is that what drove the price of ether up was that people needed to buy it for gas fees for NFTs. And when everybody was just game over and everybody was going nuts over it, people were minting them that used gas fees, people were buying them that used gas fees, and people were trading them that used gas fees. So that utility is what helped push Ethereum up the right way. Once you know, the number of NFT transactions started to fall, then there weren’t any natural buyers, and then it was the same. You know, earn by playing. You know it’s not going to work the way it’s structured right now, so you need something. It’s going to be an application. It’s like if you think about the early days of the iPhone and mobile computing, we really didn’t know anything about apps, right, and it was just like, okay, what apps am I possibly going to use? Then all of a sudden, Instagram’s there, social media, right and now all of a sudden, everybody’s going to download Instagram. Every kid’s going to download Snapchat. Every kid is going to download Tiktok right now. Every kid is going to download even the YouTube app. So that is a utility that forces people to use your iPhone use the app store, whatever. It’s a great way of looking at it. Yeah, with Ethereum, it’s the same type of thing. There’s no app where you say, “Okay, we’ve all got to use it.” Yeah, that’s what it needs, and it’s not going to be like, “Okay, here’s Instagram for Ethereum.” If that happens, then somebody just has a smart idea.
I think it’s like more people getting to know that he’s driving right the whole time and I’m an investor in open seat. It’s been great, but you know, and then they played well. I’m an investor in Acts. The Infinity Mavis I think they messed it up right and they kind of got hurt because they got hacked. So it’s not fully fair, but you know, you’ve got to have a reason for people to buy the token, whether it’s Ethereum or another one, other than just speculation, because when the speculators leave, it’s like Dogecoin, right? Dogecoin is kind of the starter drug for crypto; it’s cheap and easy. Maybe it is right that it just can’t do anything with Dogecoin, though. You can buy stuff. Go to Mavs.com you can buy tickets. You are free to purchase any coin you desire. For sure, when people were buying and trading Dogecoin a lot, we were making thousands of dollars a week, $10,000 a week here and there. So, it was real money for us. At the same time, once people start to stop speculating on it. Yeah, people kind of lost the vibe of it then. The novelty has worn off.
But, like I said, when it was less than a penny, my 12-year-old, back when he was like 9, was like “Oh we got buy Dogecoin on Robin Hood”. But it was his way of starting. Was that your child? Yeah, he’s not supposed to because he wasn’t 18 or whatever. But I hooked him up. But you know, in crypto in general, you need a reason to buy the token, right, and if it’s just for speculation, it’s going to go up and down, it’s probably going to disappear at some point because 95% of the blockchains are going to go. There’s just no reason for them to exist, but overall you think of Ethereum and Bitcoin. I think Ethereum and Bitcoin will survive. I just don’t know what the price is going to be and when it will be right. I do think Ethereum with smart contracts is the reason I got excited about Ethereum. I went in and I just said, “What’s all this buzz about an NFT?” and so I went and put in an NFT, and as I was setting it up and getting ready to mint one, one little field said, “royals right.” Because when you buy an NFT and you set a royalty percentage of 5%, 10%, 20%, whatever, and then it gets resold, you get paid a royalty.
Yeah, there’s nothing else in media that allows you to do that. It’s pretty crazy, right? You guys make money from your selling the products and I don’t know if you do ads or whatever. But you’re a platform. If you wanted to sell your podcast, you could, but there’s just no way really to monetize it after that first sale. For most content, there’s no way to monetize it, like if you’ve been in a YouTube game forever. And if it’s downloaded, watched, and shared, that’s great.
It is the crypto market recovering. Cryptocurrency has officially entered the bear market phase, with the value of several popular coins and stable coins plummeting to 90% below their all-time high. The current negative crypto market scenario has compelled investors to speculate on when crypto will recover after the recent Luna crypto crash. Several leading cryptos are now down. This is all thanks to the existing bear market sentiment that also triggered a massive near-term market crash. The recent crypto crash has led several crypto enthusiasts to worry, prompting them to contemplate and ask questions related to when the crypto market will regain its former glory. The recent rise in crypto in mid-July, coupled with other positive economic indicators that could indicate a slow turning of the bear market and could indicate a crypto recovery on the horizon. It may happen faster than many believe.
An unexpected boost in retail spending in June 2022 along with a federal reserve projecting an interest rate hike of just 0.75% rather than a full point at the next meeting bodes well for the economy. Since the crypto crash is related to these kinds of macroeconomic factors, Crypto could be in the early stages of recovering already. The question remains, “Will crypto ever go back up to its 2021 record highs, when the price of a single Bitcoin exceeded $64,000?” Some experts believed not only would crypto go back up but that Bitcoin could surpass $100,000.
[This article is a transcription of a video made by Savvy Finance}
[Original video: https://youtu.be/c-SHFr40T5E]