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With the combined crypto market capitalization slumping far below the $1 trillion mark earlier this week, several crypto projects are facing a massive economic downturn in response.
Weighing on the current outlook of the ecosystem, Mark Cuban, an Ethereum maximalist and owner of the Dallas Mavericks basketball team, is backing projects with positive fundamentals in the crypto industry.
In an interview with Fortune, Cuban said events like the one the crypto industry is currently experiencing will expose and crumble companies being sustained by poor market fundamentals.
“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 Shark Tank investor told Fortune. “Like [Warren] Buffett says, ‘When the tide goes out, you get to see who is swimming naked.’”
Cuban’s assertion is playing out vividly with companies like Celsius currently unable to meet up with its withdrawal obligations when it suspended this aspect of its operations just before the start of the week. The past month has seen numerous projects like Terra crumble, while legacy companies like Coinbase, BlockFi, and Gemini have announced plans to downsize their operations to cut costs.
To Cuban, these are not new, however, he maintained that there is light at the end of the tunnel as projects with good fundamentals usually survive this comprehensive onslaught.
“Disruptive applications and technology released during a bear market, whether stocks or crypto or any business, will always find a market and succeed,” he said.
Cuban is one of the Wall Street investors whose influence in the digital currency ecosystem is very strong. Known as a staunch advocate of Dogecoin (DOGE), Cuban is one of the investors who are in the space for the long haul. As a show that he understands the dynamics in the crypto world, he has a number of NFTs and investments in blockchain companies.
Image source: Shutterstock
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