Why does crypto crash? “The crypto internet is going through the recession,” says Mark Cuban. Cuban echoes the resemblance of falling Bitcoin and altcoin prices to the dot-com bubble. He also explains that they will survive this collapse.
Is the altcoin market experiencing the ‘dot.com bubble’?
Billionaire entrepreneur Mark Cuban shared his thoughts on the recent crypto crash. Cuban considers crypto to be in a downward trend caught by tech and internet companies in the early 2000s.
Bitcoin (BTC) price is around $24,000 in June. As you follow on Kriptokoin.com, BTC is hovering at its lowest levels since the end of 2020. Also, sales of Non Fungible Tokens (NFT) fell between January and March 2022.
Mark Cuban addressed the fall in a viral Twitter post on May 9. Crypto prices have continued to decline since then. “Crypto is going through the recession that the internet is experiencing,” Cuban wrote.
The comparison between cryptocurrency and the early days of the internet has been previously made by Cuban and others, including entrepreneur Gary Vaynerchuk. The dot-com bubble burst in 2000 after several internet-centric companies received high levels of investment speculation. However, it eventually hit rock bottom. Mark Cuban sold his company, Broadcast.com, to Yahoo for $5.7 billion in 1999, just before the dot-com collapse. Broadcast.com was later discontinued.
Why has the NFT market dropped so much?
Cuban, on the other hand, is heavily invested and interested in the crypto and NFT space. He claims to own several thousand dollars worth of Bitcoin, Ethereum and Dogecoin, according to a CNBC report. He also says that 80% of his investments not on ‘Shark Tank’ are crypto related.
But what’s next? The popularity of NFTs has exploded over the past few years, with creators like Beeple and NBA Top Shot selling NFTs for millions of dollars. However, recent NFT sales have plummeted as more creators come to market. Average daily trading volume on OpenSea, the largest NFT market, fell by more than 55% from January 2022 to March 2022, according to crypto data tracking platform Dune Analytics. Jordan Birnholtz, co-founder of NFT marketplace Neon, has this to say on the subject:
I think early on you saw a lot of new contributors who were enthusiastic about it but didn’t quite grasp the basics. I think cooling is a reflection of that.
Millionaire Vaynerchuk, who has early invested in companies like Facebook, Twitter, Uber, Snap and Venmo, said similar things to Cuban in July 2021. Vaynerchuk also notes that NFTs and crypto took similar paths to the early internet. The famous billionaire made the following statement:
I look at NFTs exactly as I looked at the internet in 1999. Internet stocks and valuations have skyrocketed ahead of time. Then many collapsed. Meanwhile, eBay, Google, and Amazon were all there.
“These altcoin projects and Bitcoin will survive, but many will fail”
Mark Cuban said similar things in a now-deleted tweet last January. Bitcoin and altcoin investor Cuban commented:
Watching crypto trading is like a full internet stock bubble. Definitely. I think BTC, ETH and others will be similar to those built in the dot.com era like AMZN, EBay and Priceline that survived the bubble burst and thrived. But most won’t.
Cuban’s latest crypto comments come as the prices of many cryptocurrencies are falling. Bitcoin and Ethereum prices were hovering around half of their November peaks in June. On May 9, the same day as Cuban’s tweet, shares of crypto exchange Coinbase Global fell more than 13%. Also, MicroStrategy shares are over 17% and Riot Blockchain Inc. It has lost more than 13% in value.
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